The Impact of the Transformation of Age Structure on Economic Growth

Wen Zhao () and Xuyang Zhu
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Wen Zhao: Institute of Population and Labor Economics, Chinese Academy of Social Sciences, 10F, MCC Tower, No. 28 Shuguangxili, Chaoyang District, Beijing 100028, China
Xuyang Zhu: Department of Finance, Economics and Management, School of Wuhan University, No. 299 Bayi Road, Wuchang District, Wuhan City, Hubei Province 430072, China

Chinese Journal of Urban and Environmental Studies (CJUES), 2016, vol. 04, issue 04, 1-15

Abstract: The impact of the transformation of the age structure of the population on economic growth is governed by a strict law. In 12 economies under the authors’ observation, the contribution from the rejuvenation of the population to economic growth is basically 6% — the Chinese Mainland makes a contribution of 6.3%. The rejuvenation of the population has stimulated economic growth, but its contribution is very small compared with the contributions from capital accumulation and technological progress. According to international experience, in the case of addressing the transformation of the age structure of the population, relying on intergenerational redistribution will exert a great negative economic impact, while reducing the intensity of that redistribution and relying on market mechanisms to adjust the level of labor remuneration can increase the employment rate and the labor participation rate, thus raising the economic growth rate to the greatest extent.

Keywords: Transformation of the age structure of the population; diminishing the marginal return; neoclassical growth model (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1142/S2345748116500317

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