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The Impacts Of China's Demographic Transition On Economic Growth

Posted on:2020-05-29Degree:DoctorType:Dissertation
Country:ChinaCandidate:C SuiFull Text:PDF
GTID:1367330575979341Subject:Western economics
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At present time,China is in the latter part of the third stage of the demographic transition.The demographic transition leads to the change of demographic age structure in China.The youth dependency ratio reached 22.10% in 2011,the lowest in history.Then it began to increase.The number of working age population reached 1005,820,000 in 2013,the highest number in history.Then it began to decrease.The elderly dependency ratio increased slowly and reached 15.86% in 2017.For the sake of balanced population development,China started to exercise the universal two-child policy,which is bound to have a significant influence on the future demographic trend in China.Demographic age structure is one of the most important factors affecting economic growth.The reason is that at different stages of the life cycle,the income level,the consumption level and the innovation ability of an individual is not always the same.In addition,when the demographic age structure begins to change,the number of labor force and the age structure of labor force will change in approximately 15 years.Therefore,when the share of population in a certain age group changes,it will inevitably affect the level of savings,the level of technological innovation,the number of labor force and the age structure of labor force and finally affects the economic growth.Currently,the scholars in China and abroad usually choose one of the mediating variables,which is important to the economic growth,and then study how the changes in demographic age structure brought about by the demographic transition influence the economic growth in China through the mediating variable when they are studying the influence of the demographic transition on the economic growth.Owing to the reason that there are more than ten mediating variables,it is very difficult to recognize the influence of the demographic transition on the economic growth in China if they only study one of the mediating variables.To overcome this shortcoming,in this paper,based on the analysis of the present situation and the future development trend of China's demographic transition,we study the impacts of China's demographic transition on economic growth from the following four aspects: the influence of China's demographic age structure change and marriage competition on household savings rate;the influence of China's demographic age structure change on the level of technological innovation;the influence of China's demographic age structure change on the number of labor force and the age structure of labor force.Thus we can achieve a very comprehensive understanding of the influence mechanism of China's demographic age structure change on economic growth,and broaden the research perspective of the impacts of China's demographic transition on economic growth.In addition,we have also put forward some suggestions.These suggestions will help us to deal with the challenges from the ageing of demographic age structure on economic growth.Hence this study has certain research significance theoretically and practically.This dissertation may be chiefly divided into eight chapters.The first chapter is the introduction which copes with research background,research significance,research contents,research methods and contributions of the dissertation and limitations of the dissertation in the order stated.The second chapter deals with the literature review,briefly introducing and reviewing the representative research achievements both in China and abroad from the four influences of demographic age structure on household savings rate,of demographic age structure on the level of technical innovation,of demographic age structure on the number of labor force and labor age structure and,of demographic age structure on economic growth,on the basis of which I point out the research to be studied.The third chapter studies the present situation of China's demographic transition and the future development trend of population in China.First of all,briefly introduces the experience of demographic transition in West European countries.Secondly,analyze the present situation of demographic transition process since the founding of the People's Republic of China.We find that at present time,China is in the latter part of the third stage of the demographic transition.Finally,predicting the trend of the population number and the demographic age structure in China between 2016 and 2066 by the use of cohort component method after the implementation of the universal two-child policy.According to the population projection results,there is an upward trend in the number of the elderly population,the elderly population share,the youth dependency ratio and the elderly dependency ratio in between 2016 and 2066,and a serious problem of the degree of population ageing,which may have unfavorable influence on China's economic growth.The fourth chapter does research on the influence of China's demographic age structure change and marriage competition on household savings rate.First of all,analyze the present situation and the characteristics of the change of household savings rate in China.Secondly,summarize theoretically the influence mechanism of demographic age structure change and marriage competition on the household savings rate.On the basis of the above-mentioned,a fixed-effect panel regression model and a dynamic panel regression model have been established to study the influence of demographic age structure change and marriage competition on household savings rate by utilizing of the panel data of 30 provinces from 2000 to 2016.The research results demonstrate that the rise of youth dependency ratio and the rise of elderly dependency ratio are unfavorable to the rise of household savings rate,which is in conformity with the Life Cycle Hypotheses.In addition,the above-mentioned results have also verified the hypothesis that the increase of marriage competition may raise the household savings rate.Therefore,since the Reform and Opening-up,owing to the decrease of youth dependency ratio and the fierce marriage competition,China's household savings rate continuously rises,which is favorable to physical capital accumulation and economic growth.It should be also worthy noticing that according to the population projection results,the youth dependency ratio will rise to 28.36% and the elderly dependency ratio will rise to 48.25% in 2066 in China after the implementation of the universal two-child policy.What is more,after the implementation of the universal two-child policy the birth space of the married women increases and the problem of unbalanced sex ratio at birth may effectively solved.The marriage competition in the future marriage market will decrease.The above change in demographic age structure and sex ration at birth may reduce household savings rate and cause the unfavorable influence on future's economic growth.The fifth chapter studies the influence of China's demographic age structure change on the level of technological innovation.In the first place,the influence of demographic age structure change on the level of technological innovation is analyzed theoretically.Then a fixed-effect panel regression model and a dynamic panel regression model have been established by the panel data of 30 provinces between 2000 and 2017 to study the influence of demographic age structure change on the level of technological innovation in China.The empirical results show that the rise of the youth population share and the elderly population share is unfavorable to the rise of technological innovation level,which is in conformity with the expectation of the theory.The rise of the real intramural expenditure of R&D and the rise of full-time equivalent R&D personnel is favorable to the rise of the technological innovation level,which is also in conformity with the expectation of the theory.However,the rise of working age population ratio is unfavorable to the rise of technological innovation level,which is not in conformity with the expectation of the theory.Why do we have such results? The main reasons are the following: firstly,the mechanism of encouraging technological innovation needs to be further improved in present-day China,and there is no such social atmosphere of encouragement of innovation and tolerance of failure in society,and the less enthusiasm in participation of technical innovation by working age population although the technological innovation ability of the working age population is very strong.Secondly,the transition from individual innovation capability of working age population to innovation products and achieve obvious economic and social effects,might proceed in an orderly way and takes time.In addition,according to population projection results,there is a comparatively serious problem in the degree of population ageing in the future of China after the implementation of the universal two-child policy,and the rise of elderly population ratio may exert negative effects on the economic growth in the future of China through the decrease of technological innovation level.The sixth chapter deals with the influence of demographic age structure change on the number of labor force and the age structure of labor force in China.Firstly,we analyze the historical data of population statics.Then,based on them we compared the present situation of the number of labor force and the age structure of labor force in an all-round way.Finally,the Cohort Component Method is used to predict the trend of the number of labor force and the age structure of labor force in China between 2016 and 2066 after the implementation of the universal two-child policy.It has been found that up to 2066,the number of labor force will decrease to 629,070,000,which is 179,330,000 fewer compared with the number of 2016;the share of young-age labor will drop to 21.90%,which is 4.42 percentage points lower than that in 2016;the share of middle-age labor will drop to 45.69%,which is 3.21 percentage points lower than that in 2016;the share of old-age labor will rise up to 32.41%,which is 7.63 percentage points higher than that in 2016.This will have a negative influence on China's long-term economic growth in the future.The seventh chapter explores the influence of demographic age structure change on China's economic growth.Firstly,the importance of savings(investment),technological innovation,the number of labor force and the age structure of labor force on economic growth is analyzed theoretically.Then the contribution rate of physical capital stock growth,labor input growth and total factor productivity growth(technological innovation)to China's real GDP growth is analyzed quantitatively in the use of China's economic time series data between 2000 and 2017 under the framework of Cobb-Douglas production function.We found out that the contribution rates of the physical capital growth;the labor input growth and the total factor productivity growth(technological innovation)on China's real Gross Domestic Product growth are 74.41%,4.89% and 20.70%,respectively.Consequently,the influence mechanism of labor force age structure change on China's economic growth is attested from an empirical point of view in the use of the panel data of 29 provinces from 2007 to 2016.The empirical results show that the rise of young-age labor share would promote economic growth and the decrease of young-age labor share would produce unfavorable effects on economic growth,which has been in line with the theoretical findings.The decrease of young-age labor ratio in the future may cause negative effects on China's economic growth.On such basis,we analyzed the influence mechanism of demographic age structure change through investment(savings),technological innovation,the number of labor force and the age structure of labor force on economic growth theoretically based on the research findings of the previous chapters.We have found that in different periods of the demographic transition,the influence of the demographic age structure change on savings(investment),technological innovation,the number of labor force,the age structure of labor force and the economic growth is not the same.The demographic age structure change since the Reform and Open-up increase the household savings rate and physical capital accumulation,the level of technological innovation,the number of labor force,and is favorable to the economic growth.But the future demographic age structure change will reduce the household savings rate and physical capital accumulation,is unfavorable to the raise of the level of technological innovation,may decrease the number of labor force and lead to labor force ageing,which will cause negative effects on China's future economic growth.Finally,we utilize the GDP Component Method and calculate the potential influence of the future demographic age structure change on China's economic growth.We found out that the average annual growth rate of per capita Goss Domestic Product will decrease 1.39% if we change the demographic age structure between 1980 and 2015 into the demographic age structure between 2016 and 2041 under the universal two child policy.Therefore,the demographic age structure change since the Reform and Open-up is favorable to the economic growth and the future demographic age structure change may be unfavorable to the economic growth.The eighth chapter copes with conclusion and suggestions.Firstly,the research conclusions from Chapters Three to Seven have been presented,on the basis of which the suggestions are put forward in order to deal with the challenges from the future demographic age structure change on economic growth.
Keywords/Search Tags:Demographic Transition, Economic Growth, Household Savings Rate, Technological Innovation, Labor Force
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