Many economies in East and Southeast Asia are progressing toward becoming aging or aged societies. The impacts of this demographic transition are multifaceted and far-reaching and include declining tax revenues, leading to fiscal imbalances, and possible increases in government expenditures for coping with care expenses and pension schemes. This study aims to provide insights into ways to balance fiscal revenue against costly pension and social security systems and increasing healthcare expenditures.Using panel data for 178 countries across 18 years to capture the state of fiscal balance and data on demographic transition, we estimate three models to analyze the relationships between (i) demographic transition and government balance, (ii) demographic transition and government health expenditure, and (iii) demographic transition and government debt. The results first establish that health expenditure is negatively associated with the government balance. Then, for the relationship between demographic transition and health expenditure, old-age dependency and the share of the population aged over 64 shows a significant positive relationship with health expenditure. We find that demographic transition does not have a direct effect on the government balance, but instead has an indirect effect through higher government expenditure. This can be explained by the high costs of treating health conditions related to old age, including chronic illnesses.Our findings provide important implications for fiscal sustainability and necessitate comprehensive reviews of public health spending; healthcare reforms that prioritize accessibility for all and efficiency in healthcare services; and cost-sharing measures to mitigate the age-related fiscal burden. These measures will be particularly important in dealing with the impacts of the coronavirus disease (COVID-19) pandemic, to which the elderly are particularly vulnerable.

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This paper estimates returns to schooling in Thailand by applying the regression discontinuity approach to the change in the compulsory schooling law in 1978. This law enhanced human capital investment on the eve of rapid structural transformation. The returns to schooling based on the instrumental variables estimation were around 8%, while ordinary least squares (OLS) overestimated such returns. Returns were higher for females, urban areas, the services sector, and underdeveloped regions. The findings contrast sharply with studies exploiting similar institutional changes in developed countries where OLS estimates underestimate returns to schooling, implying that former school dropouts tend to have higher returns than those already in school before the law change. Ability bias is more likely to arise in developing countries, possibly because parents might be forced to keep children only with higher abilities in school, reinforcing inequality among children within the household.

This study examines the current situation of environmental, social, and governance (ESG) investment in Association of Southeast Asian Nations (ASEAN) countries. Based on a purposive sampling, our sample includes 143 leading firms from 10 ASEAN countries. By intensively reviewing firms’ multiyear annual and sustainability reports, we utilize content analysis to identify the characteristics of ESG firms (firms considering ESG factors in their investment decision-making process). Our result shows that ESG firms, on average, have higher profitability. Moreover, ESG investment helps lower costs and boost revenue and profits. However, ESG investment has only been implicitly and unsystematically implemented in ASEAN firms.