The Research On The Impact Of Age Structure Change On The Economy In Zhejiang Province

In recent decades, with the rapid development of the economy in Zhejiang province, its population age structure has been changing. In consequence, its economy is facing many challenges and difficulties, such as disappearing of low-cost advantage of labor concentrated industry. This paper mainly analyses the impact of aging population on the economy in Zhejiang province.This paper analyses how aging population will influence the economy deeply through savings and investments, and measures the influence coefficient between aging population and economic growth by regression.The main methods include vector auto-regression and panel model. Theories about age structure are introduced, for instance, Peter Diamond’s theory explains how people spend their income on saving and consumption to obtain the maximum utility when they are young and old.The regression results show that aging population results in low saving rate and there exists a positive correlation between economic growth rate and investment rate. Aging population has been regressing the economy growth and higher dependency rates have negative impacts on economic development because investment comes from saving. The panel data of 11 cities in Zhejiang province from 2003 to 2013 is used for analysis of regression and its result shows that the dependency rate and other independent variables have different impacts on the 11 cities.Finally some suggestions and countermeasures are proposed to tackle the difficulties with aging population, such as technical progress and education popularization.