Major Economic Crises that Shape East Asian Cohorts

Economic crises are important factors to consider when defining cohorts. They not only impact the current generations, but also the future ones in many different ways. However, unequal impact of the crises gives way to another way of segmenting the impacted cohorts.

In a conversation last week, a colleague of mine pointed out a major difference between his generation, who was born after 1975, and another born just a couple of years earlier in Korea. According to him, the financial crisis in Korea in 1997 was the main reason for this difference. He also mentioned the "failing generation" of Japan as the result of the economic downturns in the 1990s and early 2000s. These both are in line with the generation cohort concept that I wrote in a recent post.

I did a quick research on the issues and found out a couple of interesting points:

1. Japan's severe economic recession in the 1990s till 2002 significantly reduced the employment rate, especially that of full-time employment, among the newly graduates in this country. This cohort was born from 1973 to early 1980s. This in turn harms their income level, as well as work experience necessary to get into full-time job later (Yukiko Abe, 2007). The recession is clearly a defining moment that shaped this cohort.
2. The impact above is more severe for married men and unmarried men during the period. For women, the factor that made the most difference was not marital status, but education level (Yukiko Abe, 2007). The author however didn't offer any explanation for this phenomenon.
3. Japan's aging population puts a high pressure on the current and future generations, creating a high demand to reallocate the security burden among the cohorts (Makoto Saito et. al., 2005).
4. East Asian financial crisis in 1997-1998 has shaken the confidence and increased unemployment of the young people entering the job market. The majority of these people in South Korea couldn't prepare for the new work requirements and failed to adapt to it later. The next cohort, born after 1975 (South Korea's mandatory military service can be considered as increasing the traditional "come of age") was more practical when selecting job and feel less attached to company's lifetime career like their previous cohort (Vageshe, 2003).
5. Impact of the crisis on people working in the formal jobs is much more than people working in farming environments (Vageshe, 2003).
6. South Korea's birthrate dropped significantly after the Financial Crisis. An official study revealed that couples with elementary school backgrounds have only 0.14 babies after the crisis as opposed to 2.63 children prior to the crisis (Kim John-ber, 2007). This huge difference will likely to create more socio-economic impacts to future generations in addition to the crisis cohort itself.