| Population aging is an inevitable phenomenon in the social development process of China. And its salient feature is the conflict between sustained aggravating of population aging and the underdevelopment of economy, that's, getting old before getting rich. And under such circumstances where the degree, the speed and its disparity of regional distribution are to be aggravated, the conflict is getting increasingly serious.Population aging will cause a series of problems to China's economic growth.First of all, the ratio of labor force to the total population would fall dramatically, casting negative effect on the labor force supply. And this is especially the case in developed countries. In order to compensate such a loss in labor force and alleviate its consequent negative impact on economic growth, the standard measure is to absorb the immigrants. China has a large population and the labor force seems to be free of such an adverse situation within 20 years in the future, however, from the long run, it's unavoidable to come across such a situation, and when this happens, it's impossible to solve the labor force shortage just by absorbing immigrants. Secondly, population aging has negative effect on the improvement of labor productivity. Compared with the young laborers, the working capacity and efficiency of the aged laborers is weakened, and sometimes they are more prone to suffer from diseases, which will add to the seriousness. And the aged laborers comparatively have less ability and are more reluctant to accept new knowledge and new techniques. Still more, the increase of aged laborers will decelerate the pace of technological improvement and industrial adjustment. And finally, population aging seems to reduce capital formation, negatively worsening the prospect of economic growth. By light of Life-cycle Hypothesis, the saving-consuming behavior changes obviously in different stages of life and people have different consuming-saving propensities in different stages of life. People usually save more and invest in working stages and live on their savings when they're old. Therefore in that case, the deepening of degree of population will cause consumption propensity to grow while saving propensity fall, reducing capital formation. China is a developing country and lacks capital, so population aging will greatly affect economic growth.Hence it's really a challenge to promote economic development with serious population aging.The theoretical framework I construct in chapter 3 is helpful for the analysis of the mechanism and influences of population aging on economic growth. It justifies that savings and investment, labor productivity and labor force are the sources of economic growth, and population aging generally exerts negative impacts on such factors. And as a key part of the framework, the growth model with population aging ingredient shows that population aging negatively affects economic growth, through the channel of reducing capital formation and labor productivity.The framework is used in Chapter 4 as a guide for the analysis and assessment of China's economic growth. We find that capital formation, labor productivity and labor force are the most significant contributors to China's economic growth. Moreover, the analysis of sources of labor productivity reveals that capital formation and human capital are crucial factors. Therefore, capital formation not only directly affects economic growth, but also indirectly through influencing labor productivity; and the limited impact of human capital on economic growth, due to its underdevelopment, doesn't mean that it's less effective than physical capital. To sum up, population aging has negative effect on China's economic growth if it reduces the capital formation, hinders the development of human capital and reduces the quantity of labor force. Finally, some possible policies are given.
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