The Effects Of Demographic Changes On Economic Growth

In the past three decades,China's population structure has undergong a historically change with China's economy takeing-off.The fertility rate rapidly drops to an exceptionally low level.The acceleration of aging population and disappearance of demographic dividend occur simultaneously as the economic growth slows down.Facing the critical period of upgrading of industrial structure,pushing the urbanization and crossing the middle-income trap,deteriorating aging population lay more pressure on the economic growth.In order to avoiding the trap of low fertility rate,slowing down the speed of aging and realizing the energy conversion between the old and new,China has introduced new fertility policies that enhance the fertility level,optimize the population structure,alleviate the burden and pressure of population aging.Therefore,understanding the relationship between demographic changes and economic growth and the causes of fertility decline is of great importance for making effective fertility policies.This paper is aimed to systematically and comprehensively analyze the effects of demographic changes on economic growth and the causes of fertility decline by economic theoretical modelling and econometrical approaches,thereby providing scientific basis and reference value to policy-making.The orders of this paper is made from the effects of demographic changes on economic growth(in chapter 2-5)to the causes of fertility decline(in chapter 6 and 7).The main contents and conclusions of this paper are as follows:1.Based on the theory of endogenous economic growth,we establish the overlapping generation model to discuss the causes,effects and transmission mechanism of population structural change,and analyzing these effects by applying static panel data model using panel data from China and 25 OECD countries between 1971 and 2013.The empirical results show that:the effects of demographic change on economic growth mainly through the path of saving-investment and the path of human capital accumulation;Due to a larger positive public human capital investment effect and a smaller negative precautionary saving effect,fertility has an positive effect on economic growth;Due to a larger negative human capital investment effect and a smaller positive precautionary saving effect,infant mortality has an negative effect on economic growth;Due to a larger negative human capital depreciation effect and a smaller sum effects of precautionary saving and human capital investment,the life expectancy does harm to economic growth.The demographic change has a negative effect on OECD countries by an annual contribution rate of-0.0422%,among which the special case is Japan,which country has an annual contribution rate of-0.1408%because of aged population.Because of the decreasing infant mortality rate and alleviated children dependency burden,the demographic change has a positive effect on China by an annual contribution rate of 0.0212%in the past four decades,which is in accordance with the first demographic dividend.If the total fertility rate of China continues to decrease,the aging will aggravate the dependency burden and do harm to economy.2.As current econometric models applied to measure the effect of demographic change cannot deal with problems of time-spatial effect and heterogeneity,we establish a new dynamic spatial panel data model taking account of time-spatial effect and heterogeneous disturbance to reevaluate the effect of demographic change on economic growth.Firstly,we find instrumental variables and second moment conditions and establish GMM estimators for time correlation and spatial dependence coefficients,and apply OLS and HAC to estimate regression coefficients and variance respectively.Besides,the asymptotic theory shows that the above estimators are consistent and asymptotically normal,and have standard convergence rate.The simulation test proves that their finite sample properties perform well.At last,we apply the model to reevaluate the effect of demographic change on economic growth,which results show that economic growth has time-spatial effects,and the positive influence of fertility is not large.Hence,the reevaluation results are consistent with the static panel data model.3.Based on the perspective of countryside-city population migration,we take household fertility decision into account and discuss the effect of urban-rural structure on economic growth by using China's time serial data.The analysis of theory implies us that the comparative advantage influences the labor market mobility and fertility decision make a second effect on labor market.The empirical results show that countryside-city population migration attributes to fertility decline and motherhood timing delay,promoting economic growth by capital expansion and fertility quality rise."The tide of capital",plunged demand and demographic dividend exhaustion make threats on growth sustainability.New supplies creation and inequality reduction of education can continue to attract rural labors,promote urbanization and fertility rise,and ensure the sustainability of economic growth.4.We propose the network-DEA model with environmental variables to analyze the influences of demographic changes on technical innovation.The proposed model is composed of conditional network-DEA estimator and defined weighted conditional network directional distance function.The conditional network-DEA estimator not only inherits the advantage of conditional DEA estimator,but also has the properties of general network-DEA estimators.The defined weighted conditional network directional distance function is a non-radical and non-oriented efficiency measure type,which makes up the disadvantage of conditional directional distance functions.Based on the established model,we make the following conclusions.The demographic transition generates largely latent demographic dividend which can be released by participating in international division of labor and trade.The empirical rusluts show that the demographic age change has none influence on technical innovation while the demographic urban-rural change has positive effect on technical innovation.The effect of demographic urban-rural change on the knowledge production process is more than the knowledge transformation process.5.Using cointegration theory,we investigate the long-run equilibrium relationship among fertility,mortality and per-capital income from both time serial and panel data.The results show that there exists a long-run equilibrium relationship among fertility,mortality and per-capital income.Per-capital income and mortality has a negative and positive effect on birth rate,respectively.When every one unit income increases and one percent mortality decreases respectively,the birth rate increases 5.94 percent and 1.63 percent correspondingly.The fertility and mortality are adjusted through the deviation from long-run equilibrium,and per-capital income is a weakly exogenous variable.The influence of mortality on fertility mainly occurs in the period before the reform and openness policy,and the influence of income on fertility occurs in the period thereafter.So the mortality and income affect fertility transition in different period.The results are robust with different data types,endogeneity,heterogeneity and stochastic coefficient model.6.Based on the perspective of human capital model,we explain the income effect of China's fertility delay and its causes by using CHIP micro data.The theory shows human capital investment determines both income and fertility timing through wage horizontal effect,wage growth effect and time spending effect.The increasing human capital investment leads to income improvement and fertility delay,and the extent of income effect and time of delay are negative with fertility preference.The empirical results show every one-year fertility delay causes nearly 9 percent increase in wage and human capital investment accounts for large percent of the income effect.There exist three innovations in this paper.First,we establish the overlapping generation model through fertility,infant mortality,life expectancy,young and old dependency ratioes and take population age structure and family fertility decision into account to analyze the effects of population age and urban-rural structures on economic growth,respectively.Second,we propose the spatial dynamic panel data model with time-space correlations and heterogeneous structure and the network-DEA model with environmental variables respectively to measure the time-spatial effects of economic growth and the effects of demographic changes on technical innovation.Last,we analyze the causes of fertility decline both in macro and micro perspectives,meanwhile investigate the causes of fertility delay.Based on the above theoretical and empirical analysis results,we make the following policy suggestion.Firstly,when a roundly opening of a two-child per family policy carrying out,it's important to increase the public education investment and ensure its fairness,which can help us to enhance the quality of public education and realize the balance between quantity and quality.Secondly,develop wisdom healthy pension industries,increase the employment positions and promote economic growth.Thirdly,we should pay more attention on the economic causes of fertility transition when we pay attention to the social causes of fertility transition.Fourthly,we can advocate the balance between profits and female humanistic care,and provide allowance and preferential tax accordingly.Lastly,it's necessary to unlimit the regional migration and narrow down the income gap among regions.