There are three main reasons why I chose long-term care financial sustainability comparisons between the countries Japan and Taiwan. The reasons include the similar characteristics of the two countries, relationship between financial problems and long-term care, and the fact that everyone gets old one day.
The first thing to be discussed is the reasons why this research had chosen Japan to compare with Taiwan. Japan and Taiwan has many similar and common characteristics specifically when it comes to the issue of aging population. Japan’s situation toward aging popularity is said to be the future of Taiwan in terms of the high dependency ratio overtime and the similarity of the tendency. From graph 1, the old age population dependency ratio increases unsurprisingly overtime due to the expanding aging population; however, in the sense of the low fertility problem in Taiwan, the young age population dependency ratio has gone the opposite way compare to the old age population one. Though the low fertility offsets some of the dependency ratio, the overall dependency ratio of Taiwan is still gradually increasing which it is predicted to increase even more steeply in the future 40 years.
Graph 1. Taiwan’s Dependency Ratio Overtime
Source. Ministry of The Interior (1960-2010), National Development Council (2015-2060)
Likewise, for Japan in graph 2, we can clearly see that the old age population dependency is increasing gradually but the young age population dependency is decreasing overtime. Just like Taiwan, the overall dependency rate is climbing dramatically in the past years and even more for the future prediction.
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YEAR
Dependency Ratio Young age population dependency ratio old age population dependency ratio
Graph2. Japan’s Dependency Ratio Overtime
Source: National Institute of Population and Social Security Research (1960-2060)
Therefore, I put both Japan and Taiwan together in graph 3. From the graph, we can tell that Taiwan’s dependency ratio was decreasing at first but then started to increase approximately after the year 2010. However, that of Japan has already been growing since 1990s. We learned that Taiwan’s overall dependency ratio is slowly catching up with Japan’s, and as predicted, meet at the same point in the end. As a result, having such a similar tendency, I hope to understand the upcoming future problems and moreover the resolving possible approaches to suggest the government, the policy makers, and the analysts to implement sound policies in terms of having a more solid future long-term care plans.
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PERCENTAGE
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Dependency ratio Young age population dependency ratio Old age population dependency ratio
Graph 3. Japan and Taiwan’s Dependency Ratio Overtime
Source. Ministry of The Interior, National Development Council, National Institute of Population and Social Security Research
The second thing I would like to discuss is the relationship between financial problems and long-term care. The idea of this sentence is intuitive in the sense that without financial support, it would be highly impossible for governments to put through sound policies and to reach the goal of providing satisfying care services for the elderly. In the case of Taiwan, according to the Ministry of Health and Welfare, the total budget expectation of long-term care in 2018 is approximately 3 billion NTD and undoubtedly it would only be increasing financially. The total budget expectation from the year 2017 to 2026 of Long-term Care 2.0 is in graph 4 (The original chart is shown in appendix 1). The budget includes a variety of long-term care services, for example, not only housing care and institutional care services but also financial support for the long-term care in remote and rural areas in order to balance the allocation of resources.
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YEAR (PREDICTED AFTER AND INCLUDING 2015) Japan Taiwan
Financial supports of long-term care in Taiwan are not only from the Ministry of Health and Welfare and some other ministries, but also most of them are from the tax. According to the Ministry of Finance, the financial support of long-term care from Estate Tax is about 1.38 billion NTD, Gift Tax is approximately 2.65 billion NTD from the beginning of 2018 to the end of April. Also, the government received 144.4 billion NTD from the Tobacco Tax from June 2017 to April 2018.
Graph 4. Total Budget Expectation
Source: Ministry of Health and Welfare (Long-term Care 2.0, 2016: 168)
Though the taxes mentioned above seem to be enough for the budget, according to an article
“Long-term Care 2.0 Has Started. Where Does the Financial Resources Come From?” (H. Lin, 2016) in the magazine “遠見”, the professor of the Department of Public Finance and Tax Administration in National Taipei University of Business, Yaw-Huei Hwang, mentioned how unstable the tax policy is as a financial resource when it comes to financial sustainability of long-term care. Also, it was said to be impossible to be able to afford the future aging issues
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Total Budget Predicted (million NTD)
that have been increasing gradually. For instance, the issue of financial needs for future Dementia patients. Hence, it seems that we shouldn’t take the current financial support for granted.
Furthermore, according to the article “Japan's Elderly Boomers Squeezed to Pay More As Care Facilities Struggle” by Brasor and Tsubuku in Japan Times in 2015, Japan has suffered from the shortage of nursing care facilities for the elderly since the central and local governments were cutting down subsidies to nursing care facilities in a sense of financial problems. From this news, we learned how important financial support could be. In the other word, without money, it is impossible for long-term care plans to be successfully conducted by governments. Therefore, in my opinion, financial sustainability could be the first important task when it comes to long-term care.
The third reason why I was motivated to do this research is the sense that everyone will get old one day. Namely, getting old is inevitable for everyone and most of us will have to rely on long-term care someday. According to OECD, Japan has facing the level of “super-aging”
that no country has ever experienced yet sooner or later other countries such as countries in Europe and Asia will also have to confront the same issues that Japan is facing now.
From the aspect worldwide, according to the Department of Economic and Social Affairs of United Nations, the number of the elderly around the world is rising as a whole. Graph 5 is the world population overtime that were aged 65 and above. From the tendency line, we can clearly see the intense growth of the aged population group in within 60 years.
Graph 5. World Population Aged 65 And Above
Source: United Nations, Department of Economic and Social Affairs, Population Division (2017). World Population Prospects: The 2017 Revision, DVD Edition.
The unavoidable increase in the share of elderlies due to the decline in fertility and improvement in living standard that characterized the demographic transition. Furthermore, it is occurring throughout the whole world but not just Japan and Taiwan, which is showed in graph 1 and 2. In this respect, as the average of the whole population keeps on rising, governments should implement policies to address the needs, including for those elderly cares related to housing, employment, health care, and even social protection.
As a person with both nationalities of Taiwan and Japan, I experienced the different outcomes of elderly cares from both of my grandparents in both countries. Also as a person who will become an elderly one day in the future, I would want to know the differences under the systems of long-term care policies in Japan and Taiwan in order that both countries can learn from each other and fulfill the goal of financial sustainability.
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population (10 thousands)