The Impact Of Population Aging On The Savings Rate In China, Japan And South Korea

East Asia is one of the deepest aging regions in the world. China, Japan and South Korea are seriously aging countries in East Asia.In 2014, elderly population reached 2.2 billion in China, Which is the largest in the world. In Japan, The proportion of people over the age of 65 in the total population reached 26%, and Japan is one of the most seriously aging countries in the world. South Korea has rapidly growing elderly population.The proportion of people over the age of 65 grows from 7% to 14% in 18 years, and it is the fastest aging country in the world.According to the related research, with the aging population growing in China, Japan and South Korea, the development of aging population will inevitably have an influence on the development of on economic development, especially on the savings rate. China, Japan and South Korea have similar historical background, geographic location and cultural environment,and they also have many similarities on patterns and processes of development. They will face the same problems in the process of aging. Through the comparative analysis of the savings rate and population aging of China, Japan and South Korea, we can predict the difficulties of our country in the future to deal with the problem of aging in advance to do better to deal with the population aging. Also, some of the practices of Japan and South Korea can provide a reference for our country.This article discusses the following four aspects. The first part introduces the basic theory, including Keynesian’s absolute income hypothesis,Modigliani’s life-cycle theory, Friedman’s permanent income hypothesis and precautionary saving theory, and focus on the relationship between population structure and savings rate. The second part is about data collection and research on issues related to population ageing,the savings rate, and endowment insurance system in China, Japan and South Korea,and analyze the relationship between the aging population and the savings rates with historical data. The third part is empirical research. This paper selects elderly dependency ratio, children dependency ratio, GDP per capita growth rate and the interest rates of three countries during 1980-2014 to study the effect of population aging on the savings rate through the VAR model. The conclusion is that the effect of population aging on savings rate in Japan consistent with the life cycle hypothesis, and with ageing population increasing, the rate of savings increases at first, then tends to a smooth trend and finally decreases. But it appears contrary trend in China, the savings rate is rising with population aging. And with the accelerated process of aging, China and South Korea will be in the process of decline in the savings rate. Aging is the cause of the savings rate of the three countries, but the main factor affecting the savings rate of China and Japan is the children’s dependency ratio, and South Korea is affected by the impact of their own savings. The last part points out that the effect of population aging on the savings rate in Japan and Korea indicates the possible future development path of China and we should draw lessons from the experience of the aging process in Japan and South Korea. Also, this paper proposed relevant recommendations about how to deal with aging problems in China and how to work together to face the aging society.