Font Size: a A A

A Study On Effect Mechanism Of Demographic Transition On Economic Growth

Posted on:2011-05-25Degree:DoctorType:Dissertation
Country:ChinaCandidate:S J LiuFull Text:PDF
GTID:1117330332972570Subject:Population, resource and environmental economics
Abstract/Summary:PDF Full Text Request
Population is one of the most important determinants of economic growth. In most cases, Population is considered as one of the input elements of economic growth in the frameworks of classical economic growth models. After World War II, population explosion in the world causes people to be aware of the influence of population growth on economic growth. In recent population theories, attention has been paid to the influence of dynamic change of population structure on economic growth in the process of demographic transition.demographic transition demographic transitionUnder the theoretical framework of demographic dividend, this study extends the analysis from the so-called demographic dividend period to the entire demographic transition process, it takes the mechanism and means by which changes in age structure affect the growth in economy as the main objects, and analyses the influence of demographic transition on the balanced growth path in economy, saving behavior of residents and human capital stock in society from both theoretical and empirical perspectives.Compared with previous studies, this study includes age structure in the Solow Growth Model, builds a normativenormative analytical framework for studying the influence of population structure on economic growth by means of balanced development. The study also develops an overlapping generation model about residents'consumption suited to the conditions in China, which includes children's population, savings for children's education and expenditure for supporting the old. At last, the study analyzes the influence of change in age structure on human capital stock in society from the perspective of labor force size and per capita human capital theoretically and empirically.Main conclusions are as follows:First, on the one hand, increase of the proportion of labor-age population can promote the improvement in per capita output of workers through promoting capital deepening; on the other hand, this increase can also promote the capital demand for capital widening to slow down capital deepening and even result in inverse capital deepening in extreme cases. So the influence of labor-age population's proportion on the path of economic balanced growth is uncertain, it depends on the consumption level of dependent population, the extent and speed of the change in the proportion of labor-age population. Meanwhile, as the productive part in the total population, the proportion of labor population can also affect the growth of per capita output in society directly. In a word, the proportion of labor-age population affects economic growth through the above three means.The further analysis of dividing dependent population into underage population and elderly population shows that in the demographic dividend period, how the proportion decrease of dependant population influences the paths of economic balanced growth depends on the decrease of underage population and the increase of elderly population in proportion. Empirical results show that from 2000 to 2008, the increase of working-age population proportion in China significantly reduces the consumption rate, which validates the conclusion that demographic dividend can affect capital accumulation positively. In addition, the increase of working-age population proportion promotes capital deepening significantly. The decrease of underage population proportion has positive influence on capital deepening, and the influence is stronger than the negative one on capital deepening caused by the increase of elderly population proportion, so the decrease of dependent population proportion as a whole has positive influence on the paths of economic balanced growth.Second, the analytical results from the theoretical model show that the effect of underage dependent population on household savings is uncertain:on the one hand, the underage consume only, which has negative influence on household savings; on the other hand, saving money for investment in children's education has positive effects on household savings. The final result depends on the level of children's upbringing costs, the utility that parents get from the investment in the human capital of children and the return rate of education investment.From the micro perspective, without considering the economic implications of consumption and income, the impact of aging population on household savings depend on their retirement income and accumulated wealth during their working time, so the aging of population does not necessarily lead to the decline of household savings. Influenced by duties of supporting both children and the elderly, the positive relationship between the proportion of labor-age population and household savings remains uncertain to a large degree.The empirical results show that from 2000 to 2007, in urban areas, proportion of aging population has a positive relationship with household savings, which proves the existence of second demographic dividend. However, the proportion of labor-age population and the proportion of underage population have no significant effect on household savings. In rural areas, the proportion of underage population has significant negative influence on household savings while the proportion of working-age population has significant positive influence on household savings.Third, since 1978,54.1% of the growth in human capital stock in China is contributed by the growth of labor population, and 45.9% is due to the increase of average human capital of people at work. The decrease in the proportion of underage population can significantly improve average education resources for school-age children, which verifies the conclusion in demographic dividend theory that favorable demographic changes can promote human capital formation. Policy simulation results show that in the near future there is great room for making policies for relieving the negative influence of decrease of labor population on economic growth by increasing the rate of labor participation and the level of average human capital. In the long run, unemployment, not labor shortage, still remains the main problem in the labor marker of China.
Keywords/Search Tags:Demographic Transition, Economic growth, Population Dividend
PDF Full Text Request
Related items