Transition from Demographic Dividend to Reform Dividend:——Simulation of China's Potential Growth Rate

Due to diminishing demographic dividend characterized by a falling workingage population and rising dependency ratio, China's long-term potential growth rates will keep declining, likely to be a mere 6.6% during the 13 th Five-Year Plan period(2016-2020). China's economic growth sustainability hinges upon its transition from the previous dependence on demographic dividend to the future reform dividend. In the growth accounting equation, we have simulated various reform initiatives and arrived at the following findings. First, although both the labor participation rate and TFP can increase China's potential growth rate, the former will only achieve a short-term growth effect, which will diminish in the long run. By contrast, the growth effect of TFP demonstrates the tendency of continuous increase. This further indicates that China's economic growth will increasingly rely on TFP improvement instead of traditional factor input. Second, different from the diminishing growth effect of enrolment rate, training may play a pivotal role in human capital development to significantly enhance potential growth rates. Third, if all reform initiatives can achieve their expected effects, integrated reform dividends may reach one or two percentage points of China's potential growth rate.

The impact of child births on female labor force participation in China

Adjustments to fertility policy in recent years have led to changes in fertility level and these have had an impact on the overall population and have implications for labor force participation.In particular,fertility policy adjustments have had a direct influence on the female labor force.This paper uses data from China Family Panel Studies in 2016 to test the impact that increases in the number of child births that have occurred as result of shifts in fertility level are having on women’s labor force participation.Our findings show that the influence of the number of children on the participation of married women in the labor force is shown by a“U-shaped”non-linear relationship dominated by substitution effect and income effect.The turn-ing point of urban married women from the substitution effect to the income effect occurs earlier than it does for rural married women.This means that urban married women are more sensitive to the economic pressure that results from child births.Therefore,the Universal Two-Child policy,introduced at the beginning of 2016,inevitably has a direct negative effect on women’s labor force participation.Help-ing women to maintain work-family balance has become a problem that must be addressed at present.

Grandparent-provided childcare and labor force participation of mothers with preschool children in Urban China

This paper investigates the effects of grandparent-provided childcare and the access to daycare services on the labor force participation of mothers with children under 7 years old in urban China.Using two-stage residual inclusion method,the analysis finds that grandparent-provided childcare and the access to daycare services both have strong positive effects on maternal labor force participation(MLFP).Specifically,having grandparent-provided childcare increases MLFP by 38-43%,whereas having access to daycare services increases MLFP by 24-29%.The analysis also finds that having a healthy grandmother is a significant determinant in whether grandparent-provided childcare is utilized and that the demand for grandparent-provided childcare is higher in localities in which daycare services for children under 3 years old are more expensive.These results indicate that grandparents,particularly grandmothers,play an important role in sustaining MLFP,particularly as the supply of publicly funded daycare programs is declining.

Is the Problem of Population Aging Real?An Answer Obtained from the Labor Force Participation of the G7 Countries

Old-age dependency ratio(OADR)is commonly used to indicate the financial burden of population aging;increases in OADR have caused widespread concerns.To better measure the financial burden,this paper proposes a dependency ratio of non-labor-force population to labor-force population(NLDR).This ratio includes OADR as a special case.This paper finds that,when measured by NLDR,financial burden actually declined in five of the G7 countries during the years 2000-2014.To project future trends,labor force participation rates by age f(x)can be forecasted using the coherent LeeCarter method.This paper combines the forecasted f(x)and the population projections of the United Nations,to forecast increases of NLDR for the G7 countries between 2014 and 2050.These increases are on average less than onefifth of the increases projected for OADR.Because OADR ignores the increase of labor force participation,its description of the problem of population aging for the G7 countries in the past is unrealistic and inaccurate,and forecasts of the future based on OADR are likely to be just as unrealistic.Understanding the conditions and reasons for increases in labor force participation can provide valuable insights into the issues of population aging in China,where the remarkable increase of OADR may result in real financial burdens.One condition for labor force participation to increase could be that people remain in good health,which makes continuing to work more feasible.Other reasons for labor force participation to increase are likely to be found in government policies that encourage people to continue working longer.For China,collecting reliable data on labor force participation is also crucial.Without these data,the effects of the policies that encourage people to continue working longer cannot be detected;and therefore the policies cannot be properly developed.

Balance and Sharing:Women's Childcare Time and Family's Help

It is of crucial importance for professional women to strike a balance between childcare and work.Help from family can effectively reduce women's time spent on childcare.Based on relevant survey,this paper successively analyzes the time of mother,father and grandparents invested in childcare and explores how women are supported by their family in this duty.Infant and childcare can be as time-consuming as a full-time job.Mothers have always played a primary role in infant and childcare,while grandparents,offering a helping hand to effectively alleviate the mother's workload,can play an alternative role,which is of great significance.This is particularly true in early childhood,when more than 40% of Chinese children are under the care of grandparents,with relatively limited participation of their fathers.Childcare gap between mothers and fathers is even larger in rural China.It is quite common for a family to turn to nursery services when their child are three years old to significantly alleviate the mother's childcare burden.When it comes to the design of relevant public policies and projects,consideration should be given to the role of each family member in taking care of infants and children in different growth stages to explore more options for childcare.More specifically,in addition to motherhood,grandparents' support should be valued,and fatherhood should be enhanced.

China's Labor Transition and the Future of China's Rural Wages and Employment

This paper contributes to the assessment of China＇s rural labor markets. According to our data, the increase in off-farm employment that China experienced during the 1980s and 1990s continued during the 2000s. Our analysis shows that migration has become the most prevalent off-farm activity, although the destination of migrants is shifting from outside of one＇s province to destinations closer to home. The present paperfinds that large shares of male and female individuals, especially those under 40 years, are working off the farm. These findings represent an important contribution to the labor economics field. First, the results of the present paper reveal that the labor transition from the agricultural sector to the non-agricultural sector for key segments of China＇s rural labor force is nearly complete. Second, although a large share of China ＂s rural labor force work in agriculture, most of these workers are older men and women （and likely would not be willing to take low-wage, labor-intensive jobs）. Third, the rising unskilled wage rate in China is partially a result of the tightening of the labor force in the young age cohorts. Finally, due to factors associated with the one child policy and other demographic transition forces, successive age cohorts will continue to fall in absolute number in the coming decade. Assuming China＇s growth continues, we expect to see further wage increases since it will take higher wages to coax more workers to work off the farm.

Population Change and Resulting Slowdown in Potential GDP Growth in China

As a result of the shrinking working age population （aged 15 to 59 years）, all factors that have driven China＇s rapid economic growth over the past 30years tend to diminish from 2010. The present paper estimates the average annual growth rate of potential output to be 7.2percent over the 12th Five-year Plan period and 6.1 percent over the 13th Five-year Plan period. Future sustainable growth requires furthering economic reform in related areas to enhance potential growth. This paper simulates two scenarios in which both an increase in labor force participation and improvement in total factor productivity can significantly enhance the potential GDP growth rate. Relevant policy implications are discussed.

Higher Education Expansion in China,1999-2003:Impact on Graduate Employability

We examine the impact of China s higher education expansion on labor market outcomes for young college graduates using China s 20051 Percent Population Sample Survey.Exploiting variations in the expansion of university places across provinces and high school cohorts between 1999 and 2003,we apply a difference-in-differences model and take into account the demand-side effect by using the Bartik index.We find that the expansion of higher education in China decreased unemployment rates among males and college graduates in the short term.However,the policy decreased women s labor force participation and individual earnings in high-skilled white-collar jobs.We further discuss potential channels affecting the outcomes that were observed.Our results illustrate the broad economic benefits of higher education.The findings shed new light on the contribution of young skilled labor in the economic growth of China and call for policies that can alleviate the short-term negative impact of higher education on individual students and maximize human capital.Our study also provides an interesting example of the consequences of the unequal expansion of higher education opportunities on the labor market of an emerging economy.

The Second Demographic Dividend as a Driver of China's Growth

As China’s demographic transition enters a new stage,the“first demographic dividend”-the economic advantage resulting from demographic changes in recent decades-is bound to disappear permanently.China s future development will be characterized by an aging population.The“second demographic dividend”refers to new sources of economic growth derived from this later population change.This paper reveals major constraints caused by aging in China,which is characterized by a tendency to grow old before becoming rich.As the population ages,human capital improvement slows,labor force participation declines and consumption power reduces.This paper suggests taking advantage of a population“echo effect”to improve human capital at all ages,to enhance workers’ability to benefit from employment,and to improve the labor participation rate of the elderly,which in turn would increase the income and social security of the aged.These measures are conducive tofuture economic growth and to the cultivation of the second demographic dividend.