The Happiness Equation in the Era of a 100-Year Life

[Seoul Sinmun · Open World · December 1, 2012]

Yun Suk-myung, Research Fellow at the Korea Institute for Health and Social Affairs (KIHASA)

Yun Suk-myung, Director of the Pension Research Center at the Korea Institute for Health and Social Affairs (KIHASA)

As someone who frequently travels abroad on welfare matters, I have recently felt that the attitude of advanced welfare states toward us has changed significantly compared to about 10 years ago. Regarding welfare controversies within their own countries, I often receive questions such as, "How are you in Korea doing it now, and what is the outlook?" It seems certain that we have risen from being objects of neglect in the past to objects of interest. The background evoking this interest seems to be the achievement of democratization and high economic growth, which is rare among emerging economies.

However, while those outside envy us and seek to follow our lead, the reality is that we do not feel as happy as we once did. Furthermore, because the level of happiness among the public is low, welfare issues are becoming an even more pressing topic of the times.

If so, would the low happiness of our people increase dramatically if we introduced the advanced-country type (Scandinavian type) welfare system that has recently emerged as a hot topic? For reference, the national debt of Scandinavian countries are around 50% of their gross domestic product (GDP). The commonality among these countries is that while they operate high-welfare systems, the current generation bears the corresponding burden to sustain those systems. What about Japan, which was our role model until the early 2000s? Due to long-term economic stagnation and a surge in the older population, Japan's national debt has already exceeded 200% of GDP. What was in the low 30% range in the early 1990s has surged more than sixfold in 20 years. For most countries, this would be a scale that had already triggered several sovereign default crises, but Japan is enduring because it possesses massive assets accumulated while dominating the global economy. What will happen 20 years from now for Korea, which is similar to Japan in many respects? Just imagining it makes me break into a cold sweat.

Currently, we are enjoying the greatest demographic bonus period in history. This is a point where approximately 7.6 million high-quality laborers born between 1955 and 1963 are making their final efforts before retirement. When they all leave the labor market, we will face a terrible situation. This is because a small supporting population, represented by the lowest fertility rate in the world, must support the largest group of older people in our history. The projection that 38% of the total population of our country will be older people aged 65 or older by 2040 is a serious situation even in terms of national survival. In a future where the population aged 65 or older increases three to four times, what shall we do when we are already struggling to properly support some 5 million older people aged 65 or older during the greatest demographic bonus period in our history?

Could we solve these problems if we introduced a Western-style welfare state model? To avoid becoming like Japan, would the happiness of our people increase dramatically if we provided a high level of welfare on the premise of more than double the current tax burden? In this situation where the nation's status appears to be at its best in our history but the public's life satisfaction is at its lowest, what direction should we take? Even if the problem of income polarization, which is deepening over time, is resolved to some extent through the government's policy efforts, could that truly increase the low happiness of the public dramatically? I would cast my vote for the view that this is unlikely. Above all, this is because even people who are quite affluent economically do not seem to have high life satisfaction for various reasons.

When the happiness an individual feels depends on the 'level of material consumption' and 'subjective expectations for happiness,' it seems that until now we have put all our efforts into increasing material consumption to achieve 'high expectations for happiness.' However, as we will soon face the era of a 100-year life, it seems time to slightly change our value standards for happiness. We must change our happiness equation toward lowering 'high expectations for happiness' as much as we strive to raise the level of material consumption. Of course, there are minimum prerequisites. The government must support those who find it difficult to maintain even a minimum standard of living regardless of their efforts through active policy efforts, and a social system must be established to heal conflicts through social consensus so that individuals feel they live according to the amount of effort they put in.

Source: Seoul Sinmun (original article)