Changing Of Age Structure And Economic Growth

The economic behaviors of population groups of different ages are 'heterogeneous'. The production behavior, saving behavior, consumption behavior and investment behavior are significantly different between the senior, junior population group and work force. The variations of age structure will surely pass on to economic growth through a series of intermediate factors. The impacts of these variations are multi-dimensional, and on different aspects and levels, including economic impacts and social impacts; include impacts on macro levels such as savings, consumption, investment and current account balance also with impacts on micro levels such as family structure variation, children raising and aged parents support. Whether a country/region is 'juvenile' or 'adult' or 'aged' has close relationship with the economic growth of the country/region. However, systematic researches on the relationship between China's age structure variation and economic growth are still insufficient. We need to make thorough analysis and research on the economic effects of the age structure variation, especially the conducting mechanism between age structure variation and economic growth.During the process of population age structure variation, the decrease of dependency load will form a very important 'structural dividend' to economic growth——the demographic dividend. Demographic dividend is the driving power of China's development in 21st century, the opportunity for building 'well-off society' and the headspring of future economic growth of China. There is much theoretical and practical value in researching the impact of demographic dividend on economic growth. How to fully exploit the structural advantage brought by age structure variation is an important inspiration for keeping the medium-and-long-term economic growing fast in future. How to use the social and economic foundation accumulated by demographic dividend to answer the future challenge of population ageing and demographic debt is also an important subject that needs to be researched. Therefore, this thesis put emphasis on researching the age structure variation and the demographic dividend brought by it. The research is composed of the following parts:1. Establishing the conducting mechanism between population age structure variation and economic growth——saving (investment) mechanism, household consumption mechanism and net export (current account balance) mechanism.2. Establishing the macro analysis framework on population age structure and economic growth. Firstly we analyze the effects of population age structure variation in'East Asia Miracle', then built the spatial panel model to analyze the impact of China's demographic dividend on economic growth and the'spillover effect' of demographic dividend.3. Putting forward the strategy and policy suggestions about using age structure to promote the economic growth, including 'post demographic dividend exploitation strategy' and 'the replacement and transition strategy on the diminishing of demographic dividend. The whole thesis is composed of 9 chapters.First is the introduction. This part explains the research background, research value and the subjects of the research. It also illustrates the methodology, the content and the framework of the research. Then we summarize the innovation of the thesis and propose the future research direction.Chapter 1 is about the theory background and literature review. This chapter firstly gives a review to population transition theory, life cycle theory, population variation and economic growth theory. Then we give a systematic introduction about related researches at home and abroad from 4 sides:the theoretic and empirical researches, the latest developments and the evaluation.Chapter 2 is the research foundation. This chapter defines the concept of population age structure and demographic dividend, gives a preliminary analysis on population age structure variation and the logical mechanism of its effect on economic growth, then presents the 'sub conducting mechanism' of the effect of age structure variation on economic growth.Chapter 3 analyzes the impact of population age structure variation on household saving rate. On the basis of life-cycle saving rate function about population age structure variable, this chapter estimates with two-step system GMM method in which the endogenous effect of the variable is solved with instrumental variable, then analyzes the impact of population age structure variation on saving rate. Empirical research indicates that life-cycle model can explain the saving rate in China to some extent. The dependency load of raising children is significant to saving rate. The effect is negative on the level of 10%; The effect of the dependency load of aged people is positive but not significant; The saving rate increase caused by the decrease of general dependency load are mainly due to the fast decrease of the dependency load of raising children. In the future the dependency load (especially of aged people) variation should be closely monitored, so is its impact on saving rate and other social, economic changes.Chapter 4 analyzed the effect of population age structure on household consumption rate. On the basis of the 'three hypotheses', we use dynamic GMM estimator based on 30 provinces of China from 1990 to 2006 to build provincial panel. The results suggest that the burden of raising children significantly reduces the rate of consumption, but the aged people dependency burden on it is not significant. It is also found that the reducing of the burden of children significantly drops the consumption rate in the eastern and central regions, but has little impact in the western region. The fast decrease of children raising burden in the middle, eastern region and on nation level is an important reason of the continuously downward oscillation of household consumption rate since 1990. However, as the space of the children raising burden decrease is diminishing, its impact on consumption rate will gradually get weaker, and the effect of the variation of aged people burden on consumption rate is worthy of further attention.Chapter 5 analyzes the impact of age structure on net export. In this chapter, we first present the 'three phases' of how age structure variation affects the current account balance and conducting mechanism. Then we estimate the impact of age structure with the methods of mixed estimation, static panel and dynamic panel. The results show that dependency ratio variation significantly affects the current account negatively. However, the impact of age structure on current account in developed countries is mainly through the elderly dependency while it is primarily through the children dependency in developing countries (regions) and Asian countries (regions). The labor load alleviation brought by age structure variation affects the current account surplus by greatly stimulating net export. Fully exploiting the current account surplus (trade surplus) by invest internationally is of great strategic importance to answer the challenge of the ageing of population.Chapter 6 analyzes the impact of age structure variation on the economic growth of East Asia. First we illustrate the demographic transition of the nations and regions of East Asia by establishing the demographic transition index. On basis of the index we build the spatial panel model and empirically analyzes the take-off of East Asia from 1969 to 1996. The results show that the demographic transition significantly promotes the take-off of East Asian, while the economic and social development policies in East Asia provide opportunities for the use of demographic transition effect. Both the dependency burden of children and the aged have negative effect on the economic growth in East Asia, but the influence of the former is weaker than the latter under the same range. The experience of East Asia is of great value to China's future economic development.Chapter 7 gives full evaluation on China's age structure variation and demographic dividend. We evaluate the dynamic of demographic dividend, and then compare, predict the demographic dividend and dependency ration across regions and nations. Finally we discuss the background, experience and lessons of the demographic dividend exploitation.Chapter 8 analyzes the relationship between China's demographic dividend and economic growth. We build a dynamic spatial panel model with provincial data from 1990 to 2007 of 30 provinces and gives empirical analysis. Some conclusions are found as follows. The demographic dividend promotes the provincial economic growth significantly. It also has a significant role in the eastern, central and western regional economic growth, but there is obvious difference among them. The spillover of demographic dividend in the eastern is significant, but not significant in other regions. Among different regions, there are spillover effects in the east and central, while not significant in other regions. The demographic dividend promotes China's economic growth significantly but the'spillover' of demographic dividend is not fully exploited. In the future we need to create favorable conditions to exploit demographic dividend, facilitate the flow of demographic dividend, and extend demographic dividend in time.Chapter 9 is the policy suggestions on how to use age structure transition to promote economic growth. On one hand, we shall actively implement the strategy of industrial structure upgrade and transition of economic growth style. We also need to implement the'full flow' and full participation of labor force strategy, aged citizen participation strategy, retirement age extension strategy, collective children raising and aged citizen support strategy, demographic dividend to tackle demographic liability strategy, fully exploit'post demographic dividend'. On the other hand, with the development of population ageing, population dividend will finally vanish. We need to implement labor quality advantage transition strategy,'second demographic dividend' strategy and the strategy to coordinate the demographic dividend vanishing with retirement age extension and adjustment in birth control policy.