Demographic Change and the Labour Supply Constraint

Jane Golley () and Rodney Tyers

ANU Working Papers in Economics and Econometrics from Australian National University, College of Business and Economics, School of Economics

Abstract: China’s economic growth has, hitherto, depended on its relative abundance of production labour and its increasingly secure investment environment. Within the next decade, however, China's labour force will begin to contract. This will set its economy apart from other developing Asian countries where relative labour abundance will increase, as will relative capital returns. Unless there is a substantial change in population policy, the retention of China’s large share of global FDI will require further improvements in its investment environment, in its factor productivity and/or in its labour force participation rates. The links between demographic change, labour participation rates and growth performance are explored here using a new global demographic model that is integrated with an adaptation of the GTAP-Dynamic global economic model in which regional households are disaggregated by age and gender. China’s share of global investment, and hence its growth rate in per capita terms, is found to depend sensitively on its labour force growth and this, in turn, depends on both fertility and labour force participation. Rates of aged participation are low in China but likely to increase and this could offset the growth-retarding effects of fertility decline and ageing.

JEL-codes: C68 E27 F21 F43 J11 J13 J26 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2006-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.cbe.anu.edu.au/researchpapers/econ/wp467.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:acb:cbeeco:2006-467

Access Statistics for this paper

More papers in ANU Working Papers in Economics and Econometrics from Australian National University, College of Business and Economics, School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by ().