A Study Of Aging Structure’s Effect On Economic Development And Policy Proposals

During the “11thFive-year Planning”, Chinese total fertility rate remained below1.8, with the natural population growth rate below6‰. What’s more, the growth rateis declining increasingly. At the end of2010, Chinese population reached1.341billion,thanks to the family planning policies. Although the contradiction of total populationis well restrained, Chinese population structure is turning to a new phase---intensifiedaging due to the first growth peak of aged population. The dependency ratio ofpopulation is rising again, after more than40years of decline.“Demographicdividend” is evolving into “Demographic debt”. This poses a severe challenge tohealthy development of economy and society. The structural contradiction ofpopulation has been a key problem restricting social and economic development in thenew era.In order to encounter the new challenge in the new era, we should now focus onchange in population structure, quantitative analysis to economic and socialconsequence caused by aging and on its countermeasures, instead of the economicmiracle in past tens of years from demographic dividend. The paper aims to forecastthe trend of change in population structure through population dynamics equation, soas to develop a micro-model reflecting the relationship between population structureand GDP growth rate. And, by this, the paper also gives quantitative analysis to theinfluence on economic development by the aging trend. In addition, policies are alsoproposed in the paper in terms of finance, industry, human resource and pension. Weshould make overall plans and coordination, take comprehensive public policies andestablish an effective elder-care system, in order to address the social and economicproblems caused by aging.The paper draws the conclusion into following three aspects:First, the population rate of people elder than65will rise from8.87%in2010to24-32%in2050. Since aging is an inevitable trend, the proper attitude towardaging is to make aging researches and take active measures to address the challenge,instead of heading in the sand. At present, Chinese total fertility rate is far lowerthan the figure required for sustainable development. Provided that the fertilitylevel remains as low as that in2010, Chinese population would reduce below 1.1billion in2050, with the proportion of children population below8%andthe proportion of aging people elder than65up to32%. This could cause severethreat to economy and society. Therefore, we must make moderate adjustmentimmediately to the fertility policy. In addition, the paper points out, adjustmentof fertility policy can but lighten the aging, instead of removing the threat.Second, the growth rate of GDP per capita is largely determined by threesuch key factors as per capita capital, level of the productive forces and theproportion of working population. These three factors contribute to67%ofgrowth rate of GDP per capita. And this has been widely proved.Third, the rejuvenation of population contributes accumulatively3.94%toGDP per capita from1995to2010. In contrast, aging will offset accumulatively7.36%of GDP per capita compared to2010. The effect of “Demographic debt” isobviously. In order to encounter the aging challenge, the paper illustrates thesubstitute relations among population structure, per capita capital and technicallevel. On the basis of this analysis, the paper points out the direction ofpolicy-making in face of aging problems, together with measures to furtherimprove China’s per capita capital and technical level.The paper gives clearer, innovative opinions on the relation between populationand economy, compared to present public researches. First, it is the first time ofquantitative analysis on how aging effects economic development, instead of givingqualitative conclusion based on change trend or of focusing on economic miraclebased on demographic dividend. Second, the micro-model formulated in the paperelaborates the relation between population and economic development. The model iscredible and effective in explanation to actual economy, without many assumptions.Third, the paper forecasts the trend of change in population by regarding controllingpolicy of total fertility rate as variable. This successfully avoids the complexity andhaphazard which may arise if we take total fertility rate as a random variable. Itlowers the difficulty in analysis and gives reliable proposals. It is an effective tool toresearch on population policies.