Demographic change and the economic lifecycle deficit for Malaysia (Sharifah Azizah Haron, Tengku Aizan Hamid, Maliki Achmad, Jariah Masud, Mohd Sofi Ali, and Alim Jihen)

This study assesses the extent of the Lifecycle Deficit (LCD) for Malaysia in 2009 and discusses implications for public policy. The results show that total consumption has four peaks—at ages 15, 31, 57, and 95. The first peak, at age 15, is due to education costs, while the last peak, at age 95, may due to healthcare costs. The other two peaks are probably related to recreational and cultural expenditures such financing children’s weddings. The government of Malaysia has invested heavily in public education. The analysis shows that public consumption of education is especially high at ages 6 through 19, i.e., for primary to high school education. A high level of private consumption, especially during adulthood, is mostly contributed by “other consumption.” The labor income profile follows the usual bell-shaped pattern, with labor income peaking at age 46. The profiles of consumption and labor income over the lifecycle show that child dependency occurs through age 25, while old-age dependency occurs from age 58 onwards. The period of lifecycle surplus spans 31 years, from age 26 to 57.

Haron et al presentation

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