The Influence Of China's Population Age Structure On The Economic Growth And Business Cycle Fluctuation

This paper analyzes the economic impact of China's aging population and declining birth rate,and focuses on the impact of demographic and labor structure changes on China's business cycle fluctuation.With China's economic growth entering the New Normal,and the society going through an aging period,China is facing some grim challenges,such as declining share of the work force,increasing wage rate,and the shifting of some industries to Southeast Asia,all of which impel us to look at this problem from the supply perspective.Economic and demographic data tell us,China's business cycle fluctuation has been closely related to its demographic and labor structure fluctuation.In particular,there is a largely positive correlation between the percentage change of skilled young labor aged 30-45 and business cycle fluctuation.So we carried out theoretical and empirical research on the relationship of business cycle fluctuation and demographic fluctuation.On theoretical part,we expanded Solow Model,added variables representing demographic and labor structure fluctuation,to analyze the relationship between demographic structure fluctuation and business cycle fluctuation.On the empirical part,we built a SVAR model and a PSVAR model.The result shows,apart from total factor productivity and the capital impact,demographic fluctuation also has a significant impact on business cycle fluctuation.To be specific,the percentage change of children aged 0-14 has a lagging positive impact on business cycle fluctuation,the percentage change of people above 65 has a negative impact on business cycle fluctuation.And labor structure fluctuation has a significant impact on business cycle fluctuation,too.The percentage change of skilled young labor aged 30-45 has a positive impact,the percentage change of near retirement labor aged 46-64 has a negative impact,and with the flourishing of tertiary industry,the percentage change of unskilled young labor aged 15-29 has a positive impact.We used Leslie model to predict China's demographic structure in the future.The result shows,if the birth rate increases steadily,China's demographic and labor structure fluctuation will be weaken.In terms of the whole demographic structure,after 2040,with soaring of both new birth and aged population,the social upbringing rate will surge accordingly,so we must watch out the adverse impact of larger social upbringing rate fluctuation on economic growth and business cycle fluctuation.In terms of labor structure,the fluctuation of labor proportion is not large in the long run,which will not intensify business cycle fluctuation.In the future,the percentage change of skilled young labor will slow down,which will play a positive role to smooth business cycle fluctuation.These predictions provide strong theoretical support for my suggestions about gradually lifting curbs on child births?In the end,based on the results,we have some policy proposals to improve birth policy,optimize demographic structure,as well as to improve population quality and promote technique progresses.