| Population aging has become one of the most urgent tasks for the Chinese government to deal with. My thesis has two parts. In the first part, I run a cross-country growth rate regression on the growth rate of the percent of population of 65 and over using data of 97 sample countries from 1960 to 2010. I also run the regression with five-year intervals to allow for more variation in the key variable. All the regression results show that population aging has no economically nor statistically significant relationship with economic growth. To check for the possibility that the effect of aging on the economy varies with time, I also run regressions including time interaction term. The results imply that aging has a statistically significant impact on economy, but the impact is time-varying. The second part is a case study of China and Japan. I compare China with Japan and find that the current age distribution in current China is similar to Japan in 1986. What is going to happen in China is unsure. If China follows Japan's path, China's economy will eventually deteriorate. But the differences between the two countries might actually save China and actions could be taken by the government to relieve the aging problem. |
