The Impacts of Population Aging on China’s Economy

2022 ◽  
pp. 097491012110670
Author(s):  
Yuan-Ho Hsu ◽  
Hiroshi Yoshida ◽  
Fengming Chen
Keyword(s):  
Economic Growth ◽  
Pension Reform ◽  
Population Aging ◽  
Chinese Economy ◽  
Mandatory Retirement ◽  
Consumption Ratio ◽  
Gdp Growth Rate ◽  
Child Policy ◽  
Working Age ◽  
Older Populations

The Chinese economy had an extraordinary average GDP growth rate of 8.50 percent from 1980 to 2018. However, the implementation of one-child policy in the late 1970s has depressed the total fertility rate to below the replacement rate since 1992. China thus experienced an increasing composition of older populations in the past three decades, which puts pressure on Chinese economic growth and makes its eye-catching economic growth potentially unsustainable. This study develops an overlapping generations (OLG) model to investigate the impacts of this demographic transition in the Chinese economy. This study conducts six policy reform exercises to examine measures that could improve the sustainability of fiscal and pension systems. The simulation results indicate that a mild tax increase on either wage income or consumption does not improve the fiscal stance but creates distortionary effects on saving and consumption behaviors. Of the pension reform measures considered, the combination of extending the mandatory retirement age and cutting the replacement ratio offers the most significant improvement to pension sustainability. However, increasing the contribution rate of the working-age population has the least effect on pension sustainability and a noticeable distortionary effect on the consumption ratio and saving rate.

China’s demographic prospects to 2040 and their implications: an overview

2020 ◽  
Vol 3 (1) ◽  
pp. 66-91
Author(s):  
Nicholas Eberstadt
Keyword(s):  
Urban Areas ◽  
Population Aging ◽  
Chinese Family ◽  
Chinese Society ◽  
Marriage Squeeze ◽  
Child Policy ◽  
Working Age ◽  
Inferior Status ◽  
Wild Cards ◽  
The One

China’s population prospects over the decades ahead are largely shaped by pro-longed sub-replacement childbearing, likely to have been in effect for half a century by 2040. China’s population is on track to peak in the coming decade and to decline at an accelerating pace thereafter. Between 2015 and 2040, China’s population aged 50 and older is on course to increase by roughly one-quarter of a billion people; the under-50 population is set to decline by a roughly comparable magnitude. China is set to experience an extraordinarily rapid surge of population aging, with especially explosive population growth for the 65-plus group, even as its working-age population (conventionally defined as the age 15–64 group) progressively shrinks. Additionally, a number of demographic changes underway now constitute “wild cards” for China’s future: including (1) the impending “marriage squeeze” due to abnormal sex ratios at birth from the one-child policy era; (2) the problem of mass urbanisation under a system that consigns migrants in urban areas to an officially inferior status; and (3) the revolutionary changes in the Chinese family structure, which portend a dramatic departure from previous arrangements on which Chinese society and economy depended.

STUDY OF THE IMPACT OF RAISING THE RETIREMENT AGE ON ECONOMIC GROWTH IN THE DIGITAL ECONOMY IN RUSSIA AND EUROPE

2020 ◽  
Author(s):  
Svetlana Apenko ◽  
◽  
Olga Kiriliuk ◽  
Elena Legchilina ◽  
Tatiana Tsalko ◽  
...  
Keyword(s):  
Quality Of Life ◽  
Economic Growth ◽  
Economic Policy ◽  
Labor Relations ◽  
Pension Reform ◽  
Digital Economy ◽  
Institutional Changes ◽  
Retirement Age ◽  
The Impact

The article presents the results of a study of the impact of pension reform in Russia on economic growth and quality of life in a digital economy, taking into account the experience of raising the retirement age in Europe. The aim of the study was to identify and analyze the impact of raising the retirement age on economic growth in the context of the development of digitalization in Russia and a comparative analysis with European countries. Results: the studies conducted allowed us to develop a system of indicators characterizing the impact of raising the retirement age on economic growth and the quality of life of the population in the context of digitalization. The authors found that raising the retirement age leads to a change in labor relations in Russia and Europe. The application of the proposed indicators can be used in the formation of a balanced state socio-economic policy in the field of institutional changes in the field of labor relations and raising the retirement age. The study was carried out under a grant from the RFBR № 19-010-00362 А.

Pension Reform in Russia: Assessing the Susceptibility of GDP Production to a Shift in the Number of the Working-Age Population

2019 ◽  
pp. 80-86
Author(s):  
T. P. Skufina ◽  
S. V. Baranov
Keyword(s):  
Pension Reform ◽  
Fixed Capital ◽  
Economic Effects ◽  
Pension Scheme ◽  
Retirement Age ◽  
Working Age ◽  
Working Age Population ◽  
Long Term Forecasting ◽  
The Impact

The presented study considers the susceptibility of gross domestic product (GDP) production to a shift in the number of the working-age population due to an increase in retirement age starting with 2019.Aim. The study aims to examine the quantitative assessments of GDP production in Russia with allowance for the changes in the number of the working-age population due to an increase in the actual retirement age.Tasks. The authors forecast the number of the working-age population with allowance for an increase in the retirement age; develop a model to establish a correlation between the number of the workingage population, investment in fixed capital, and GDP production; quantify the impact of the shift in the number of the working-age population on GDP production in Russia. Methods. This study is based on the results of modeling and long-term forecasting.Results. An economic-mathematical model to establish a correlation between the number of the working-age population, investment in fixed capital, and GDP production is presented. To specify the economic effects of a shift in the number of the working-age population due to an increase in the retirement age, Russia’s GDP production is forecasted for the “old” and “new” (increased retirement age) pension scheme. The forecast is provided for three variants of the number of the working-age population.Conclusions. It is found that with the “old” pension scheme with a lower retirement age GDP production across all three variants will decrease by 2036 compared to 2017. With regard to the “new” scheme that increases the retirement age, it is concluded that an increase in the retirement age is a factor that facilitates GDP production. However, its effect on economic growth will be insignificant.

Three Challenges for the Social Investment Strategy

2017 ◽  
Author(s):  
John Myles
Keyword(s):  
Economic Growth ◽  
Population Aging ◽  
Investment Strategy ◽  
First Century ◽  
Social Investment ◽  
Current Consumption ◽  
The Social ◽  
Post War ◽  
Post Industrial ◽  
Wage Outcomes

Three challenges are highlighted in this chapter to the realization of the social investment strategy in our twenty-first-century world. The first such challenge—intertemporal politics—lies in the term ‘investment’, a willingness to forego some measure of current consumption in order to realize often uncertain gains in the future that would not occur otherwise, such as better schooling, employment, and wage outcomes for the next generation. Second, the conditions that enabled our post-war predecessors to invest heavily in future-oriented public goods—a sustained period of economic growth and historically exceptional tolerance for high levels of taxation—no longer obtain. Third, the millennial cohorts who will bear the costs of a new, post-industrial, investment strategy are more economically divided than earlier cohorts and face multiple demands raised by issues such as population aging and global warming, among others.

scholarly journals Population aging and the historical development of intergenerational transfer systems

Genus ◽  
2020 ◽  
Vol 76 (1) ◽  
Author(s):  
Ronald Lee
Keyword(s):  
Older People ◽  
Population Aging ◽  
Intergenerational Transfers ◽  
The Elderly ◽  
Intergenerational Transfer ◽  
Agricultural Revolution ◽  
Public Transfers ◽  
Working Age ◽  
Social Sharing ◽  
Private Transfers

Abstract From our evolutionary past, humans inherited a long period of child dependency, extensive intergenerational transfers to children, cooperative breeding, and social sharing of food. Older people continued to transfer a surplus to the young. After the agricultural revolution, population densities grew making land and residences valuable assets controlled by older people, leading to their reduced labor supply which made them net consumers. In some East Asian societies today, elders are supported by adult children but in most societies the elderly continue to make private net transfers to their children out of asset income or public pensions. Growing public intergenerational transfers have crowded out private transfers. In some high-income countries, the direction of intergenerational flows has reversed from downward to upwards, from young to old. Nonetheless, net private transfers remain strongly downward, from older to younger, everywhere in the world. For many but not all countries, projected population aging will bring fiscal instability unless there are major program reforms. However, in many countries population aging will reduce the net cost to adults of private transfers to children, partially offsetting the increased net costs to working age adults for public transfers to the elderly.

Status and Prospects of Economic Development in East Asia

2014 ◽  
pp. 42-52
Author(s):  
M. Potapov
Keyword(s):  
Economic Growth ◽  
East Asia ◽  
Industrial Development ◽  
Free Trade Area ◽  
Chinese Economy ◽  
Domestic Investment ◽  
Trade Area ◽  
Structural Problems ◽  
East Asia Region ◽  
Post Industrial

The East Asia region had survived the global economic crisis of 2008–2009. However, the general slowdown in the region indicates many structural problems. The Chinese economy actively switches to the domestic market, giving priority to domestic investment and consumer demand in the maintenance of the economic growth. The development of integration processes in East Asia leaves open the question of the formation of a region-wide free trade area. East Asia is capable to retain the role of economic growth locomotive, moving towards the level of post-industrial development.

scholarly journals Impact of foreign direct investment on economic growth in the world during 1975–2015

2018 ◽  
Vol 20 (91) ◽  
pp. 28-32
Author(s):  
B. B. Brychka
Keyword(s):  
Economic Growth ◽  
Literature Review ◽  
Regression Models ◽  
Trade Openness ◽  
Positive Influence ◽  
Linear Regression Models ◽  
Average Value ◽  
Gdp Growth Rate ◽  
The World ◽  
The Impact

The study is concentrated on examination the impact of FDI on economic growth in the World during 1975–2015. The study consists of four consecutive parts, including introduction, literature review, model and methodology, data, empirical results and conclusion. Each part of the study is focused on its own goals. According to the results of the literature review, there is positive influence of FDI on economic growth in various countries. Economic growth is one of the most important goals of any country. The country image on the international level is dependent on its economic power. Economic growth provides an opportunity to improve the living standards in the country. Most researchers conclude that there is a positive influence of FDI on the countries’ economic growth. However, the impact of FDI is strong in developing countries. Moreover, this relationship is stronger in countries with higher educational and technological level, trade openness and development of the countries’ stock markets. Economists often build regression models to estimate the relationship between the variables. In order to find the impact of FDI on economic growth, we are going to apply linear regression models. We take two variables as indicators of the countries’ economic growth, including current GDP expressed in U.S dollars, and annual GDP growth rate. Taking into account that the World’s GDP in current U.S dollar is a factor variable with the mentioned resulting variables, the regression equation looks as follows: The R-squared of the built model is 0.99, indicating that roughly 100% of changes in the World’s GDP is caused by the chosen factors. As it is seen from the SAS output, the residuals of dependent variable and factors variables are distributed normally among its average value. Thus, non-normality is not observed in the model. Taking into account the coefficients of the factor variables, the log GDP is most sensitive to the changes in trade as a percent of GDP. The log GDP is not quite sensitive to the changes in FDI, since the coefficient of 0.000128 means that increasing of FDI by one unit increase the logarithmic value of GDP by $ 0.000128.

scholarly journals Trade Policies and Economic Growth

2013 ◽  
Vol 6 ◽  
pp. 33
Author(s):  
Thanawat Chalkual ◽  
Jeanne Peng ◽  
Shijia Liang ◽  
Yao Ju
Keyword(s):  
Economic Growth ◽  
Economic Performance ◽  
Positive Impact ◽  
Gdp Growth ◽  
Trade Policies ◽  
Gdp Growth Rate ◽  
Restrictive Trade ◽  
Tariff Rates ◽  
Economic Growth Rates ◽  
The Relationship

This paper aims to examine the relationship between trade policies and economic growth. In order to test whether restrictive trade policies have a positive impact on economic growth, we investigate America, Australia and China, and, analyse how their economic performance varies between a free trade environment and a relatively protective trade environment. In this paper, we focus on comparative advantage and use various data such as tariff rate, GDP growth rate, unemployment rate, etc. to test the influence of trade policies on economic growth.We find some support that less restrictive trade policy leads to better economic growth; however overall tariff rates do not seem to have a strong effect on economic growth rates

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