Study On The Effect Of Labor Force Aging On Economic Development In China

Labor force aging is an inevitable and objective necessity in the process of population aging,and its impact on economic growth is an extremely complex process.This dissertation analyzes the effect of labor force aging on economic growth in China from three perspectives:the horizontal effect,the growth effect and the cyclical effect of economic growth.Since the 1970s,under the social background of China’s family planning policy and vigorous economic development,the population dependency ratio has begun to decline,and the proportion and size of the labor force has continued to increase.This population age structure,which is very beneficial to economic development,has gradually developed into a demographic dividend that promotes China’s rapid economic development.China is currently in the third stage of the population transition theory,that is,the aging stage of"low birth rate,low death rate,and low natural growth rate".The change is not only reflected in the increase in the dependency ratio and the decrease in the overall labor force number,but also in the aging of the labor force structure.Since 2000,the aging level of China’s labor force has been much higher than the world average.In 2020,China’s labor force aging level has reached to 42.5%,while the world’s average labor force aging level is only32.17%,and until 2035 The gap will continue to widen.The aging level of China’s labor force will remain high for a long period of time in the future and will be much higher than the world average.In the next 80 years,China will continue to face the test of labor force aging.In addition,China has faced serious problems caused by demographic changes such as labor shortages,rising wage levels,and the transfer of some industries to Southeast Asia.Supply-side research on the economic growth effect of labor force aging has important theoretical and practical significance.At the same time,as the world’s second largest economy,the deterioration of China’s labor market conditions will not only have an impact on its own economic development,but also have a huge impact on the development prospects of the world economy.This impact also increases the urgency of the research questions in this dissertation.This dissertation will study the relationship between labor force aging and economic growth with the goal of estimating the magnitude,direction and channel of the effect of labor force aging process on macroeconomic growth.This dissertation examines such effect from three perspectives:the“horizontal effect”,the“growth effect”,and the“cycle effect”.This dissertation is divided into seven chapters:the 1^stchapter is the introduction,which explains the research background and significance of this dissertation,sorts out the relevant research,and summarizes the research ideas,framework,innovation and shortcomings.The 2^ndchapter defines relevant concepts of the dissertation,reviews relevant theories;the 3^rdchapter summarizes the current situation of the labor force aging in China and forecasts the future trend;the 4^thchapter studies empirically the effect of the labor force on economic growth;The 5^thchapter is the empirical analysis of the effect of labor force aging on total factor productivity;the 6^thchapter is the empirical analysis of the cyclical effect of labor force aging on economic growth;the7^thchapter is the research conclusions and policy suggestion.Specifically,this dissertation uses the inter-provincial panel data of the working-age population by age group in China since 1990,using qualitative and quantitative analysis,traditional econometrics and spatial econometrics,the main conclusions are as follows:First,from the perspective of the level effect,labor force aging in China has a significant effect on economic growth.Robustness of the results has been tested.The is more significant in the eastern and western regions,but not in the northeastern and central regions.In addition,the effect shows significant spatial spillover before 2000,and gradually disappears after 2000.Second,from the perspective of growth effect,this chapter measures China’s inter-provincial total factor productivity based on the method of Solow residual.The empirical analysis shows that the labor force aging has a significant negative effect on total factor productivity under certain conditions.It means that the positive effect of labor force aging on economic growth may not be transmitted through the effect on total factor productivity.Thirdly,from the perspective of cyclical effects,this chapter uses four filtering methods to measure the economic fluctuations and test the relationship between labor force aging and economic fluctuations.The increase in the proportion of labor force in age groups 15-24 and 55-64 will contribute to economic fluctuations.China’s labor force aging will not necessarily exacerbate economic fluctuations.Based on the above research,this dissertation puts forward five policy suggestions:first,seize the“golden period”from now to 2030,when China’s labor force has a large proportion and the national burden is light,and rapidly develop the economy to lay the foundation for aging;second,publicize the idea of lifelong learning,strengthen the construction of the training system for the elderly labor force;thirdly,guide population mobility and establish a sound labor market system;fourthly,adopt flexible employment and retirement mechanisms;fifthly,increase the efforts to encourage fertility policies.