Fast Population Changes And Long-term Economic Growth In China

This thesis,adopting the overlapping-generations model that based on the individual's micro-action as analytical framework,taking the uncertain lifetime as a tool conducting related effects,utilizing the agent's decision among consumption, saving,investment and inter-generation transfer,researches on the consequent effects on macro-economic growth.The main parts of this thesis endeavors to answer the following questions:(1) if the Family Planning Policy is loosened under the exogenous demographic shocks(e.g.the decline in mortality and the rise in longevity),how would the individual's micro-decision affect long-term macro-economic growth;(2) if the individual is allowed to select his own surviving rate(longevity) through active health investment, how would his micro-decision change the transition path to converge to new steady states;(3) how would the macro-policies influence the individual's health investment and educational investment,and affect the long-term economic growth.As for the fast question,the theoretical analysis shows that,the effect of a rise in longevity on fertility,human capital investment and economic growth is different depending on the trade-off between children's number and welfare.By the introduction of PAYG pension system,an indirect effect of a change in longevity occurs through the change in contribution rate,hence,the net effect of longevity on these variables is ambiguous.However,our simulation results are consistent with the empirical facts:the effect of longevity on fertility,human capital investment and economic growth is non-monotonic.As for the second question,we find that health investment and saving are complementary at steady states,and health investment is normal good.Therefore,the economic development may results in multi-regimes:an economy starting with superior initial conditions(e.g.income per capita and health status) may converge to a steady state with higher income per capita;nevertheless,an economy starting with higher mortality and lower income may result in development traps.Our model thus verifies the observed facts:(1) the wealthier is the country,the better are the construction of medical infrastructures and medical services,and the higher is the health expending;on the contrary,the poorer is the country,the lowers is the health expending.(2) the mortality is lower and the longevity is higher in wealthier countries; but the poor country with worse health status and higher mortality may get in development traps.(3) the population ageing is more rapid and faster in wealthier countries.As for the third question,the theoretical analysis shows that,a subsidy is helpful to stimulate the human capital investment from private sections which results in an endogenous economic growth.The concrete simulations further confirm the 40-years development history of China:when the income is very low,the motive of health investment is dominated by that of consumption,which results in lower surviving rate and economic growth.But a health subsidy may enhance the private health investment and pull the economic development out of a vicious cycle.Health investments and savings increase gradually with the rise in income.The economy and surviving rate grow faster in a specific period.However,the ratio of health investment to output decreases gradually after the surviving rate exceeds a threshold,and the surviving rate and saving rate eventually converge to the balance growth path.Furthermore,as for the welfare effects of subsidies,our sensitivity tests show that,subsidizing health investment and educational investment simultaneously may result in poor countries' welfare loss in the short run,but result in higher surviving rate,economic growth rate and welfare in the long run.With the growth in subsidies,the welfare improvement arises from a positive externality from average health spending in the determination of workers' health status.However,further rises in subsidies are found to reduce in welfare,although the welfare level is still higher than in the case of without any subsidies.