As the large working- age cohort that drove the demographic dividend
grows older, however, population aging sets in. An aging population implies a fall in the working- age population that will lead to lower output. Aging also implies that each worker will have to support more and more retirees under public pension and healthcare systems. All in all, while demographic trends in Asia were conducive to economic growth in the
past, they will be markedly less so in the future. Responses to population aging can lead to very different outcomes. People may work longer, workers may increase savings to cover longer life expectancy, or there may be greater investment in human capital that will lead to higher productivity. If, for example, workers accumulate assets in anticipation of living longer, then population aging may possibly lead to a more favorable outcome for the economy. This increase in the demand for capital in response to aging is called the second demographic dividend (Mason and Lee, 2007).