Economic and Social Impact of China’s Aging Population and Public Policy Response

In mapping out China’s future development,policymakers must bear in mind the challenges from a falling birthrate and aging society.Based on previous demographic censuses and original data of large sample surveys,this study employed an indirect method for estimating China’s total fertility rate(TFR)and a demographic forecast method based on the parity progression ratio(PPR).Our analysis details the socioeconomic implications behind demographic change,and we have proposed public policy countermeasures.The findings include:(i)China’s ultra-low fertility rate over the past three decades has led to an increasingly aging society,and China’s future fertility rate is likely to continue to decrease.(ii)Around 2024,China’s total population is expected to peak at 1.407 billion,followed by chronic negative population growth at an accelerating pace.By 2050,China’s newborn population will shrink to 8.73 million and the aging population will increase to roughly 30%of the total population resulting in the total dependency ratio above 50%.(iii)With a falling birthrate and aging society,China will face unprecedented challenges with respect to education,employment,and pension.(iv)As a public policy response,China should remove birth control altogether.If the fertility rate continues to stall,policymakers should consider issuing policies to encourage birth and create a birth-friendly society for all birth cycles.

General Trends of Labor Supply and Demand in China:Problems and Policy Options

From the perspective of demographic change and economic growth respectively,this paper discusses the changes of trends in labor supply and demand,and concludes that unlimited supply of labor has ended in China,which is clearly reflected in the phenomena of "difficulty in recruiting new workers". The fundamental change in the relationship between labor supply and demand does not mean the absolute shortage of labors,but it does mean that sufficient supply of labors will be determined by reasonable growth of pay for workers.The paper also explores the general situation of labor market in China,and concludes that job creation is still a priority in spite of low unemployment rate because labor participation rate has decreased for last ten years,which is a severe labor market outcome.At the same time,the structural problems in labor market are becoming more and more severe.To realize sufficient employment,it is still necessary for China to guarantee economic growth while improving job quality and increasing gains of workers from the economic growth.

Labor compensation,labor productivity and labor cost advantage—An empirical study of Chinese manufacturing enterprises during 2000-2007

Unlike the usual practice of equating wages or labor compensation with labor cost,this paper incorporates labor productivity into an analytical framework and holds that the labor cost advantage is the relative relationship between labor compensation and labor productivity.Based on an empirical study of the data of Chinese manufacturing firms that include all state-owned enterprises and non-state-owned enterprises with their annual revenue greater than 5 million yuan from 2000 to 2007,this paper finds that labor compensation growth was accompanied by faster labor productivity growth.Hence,the labor cost advantage was not weakened during this period.Furthermore,this paper conducts an exploration of how to sustain labor cost advantages in the future and proposes that they can be sustained by upgrading the industrial structure and improving the education system.

Understanding the Past,Present,and Future of China's Economic Development——Based on A Unified Framework of Growth Theories

Through exploring the limitation of the neoclassical theory of economic growth,which classifies growth as a homogenous process,this paper reconciles various theories of economic development and explains the rises and falls of economic growth under a unified framework,focusing on incentives of the accumulation of physical and human capital.This paper classifies instances of economic growth into four categories—the Malthusian poverty trap,the Lewis dual model of economic development,the Lewis turning point,and Solow neoclassical growth model.This paper conducts empirical analysis of these categories of economic development as they are relevant to Chinese economic growth and discusses policy implications therein.

Analysis of the Changes in Rural Chinese Family Structure since Reform and Opening Up

This article uses data from censuses since 1982 to reveal changes in the family structure of rural China since the launch of reform and opening up and against the backdrop of institutional relocation,social transformation and an aging population.Since the advent of reform and opening up,rural family structure and its changes can be divided into two phases.Before the 1990 s,the household contract responsibility system was implemented,labor in rural villages was still mainly engaged in farming,and the number of nuclear families remained stable with a steady rise.After the 1990 s,as reform progress deepened,substantial numbers of young and middle-aged laborers in rural villages began to relocate into non-farming sectors and aging in rural villages rose.As those born in the early days of the family planning policy gradually matured,family structure was directly affected and changed in new ways and forms not seen before.Vocational divisions of labor among the parents of young families and married offspring emerged and the significance of cooperation for family economy and daily life between parents and offspring rose in importance.Also,the prevalence of immediate families with three generations climbed while the standard nuclear families declined,the ratio of middle-aged couples with young children that worked outside the home increased,the function of middle-aged and senior parents in the upbringing of infants and children enhanced,and the commonness of incomplete family types such as only grandparents with grandchildren increased.During this phase,the number of seniors living alone surged to the point of becoming a matter worthy of attention.

Study on the Relationship between Parity Structure and Imbalance of Sex Ratio at Birth in China

In China, the increase of the sex ratio at birth(SRB)associates with the decline of the fertility level. The change of the parity structure,one of the main reasons of the low fertility level,may also play an important part in the change of the SRB. We fi nd that the decrease of the proportion of the second and higher parity deters the imbalance of the SRB in China. The increase of the SRB in China is mainly caused by the increase of the second and higher parity's correspondent level of SRB before 2000,and the fi rst parity's SRB also Plays more and more important role after 2000.

AI’s Effects on Economic Growth in Aging Society: Induced Innovation and Labor Supplemental Substitution

This paper employs industrial robot installations that represent the level of smart manufacturing as the proxy variable of artificial intelligence(AI). Based on crosscountry panel data and China's provincial panel data, we create a two-stage least square(2 SLS) regression model to examine the effect of an aging population on AI applications and AI's effect on economic growth. In this manner, we aim to test whether AI has a substitutive effect on labor against the backdrop of an aging society and the kind of such a substitutive effect. Our findings suggest that the labor shortage arising from an aging society will prompt an economy to adopt smart manufacturing more broadly, i.e. an aging society is a driver of AI development. Smart manufacturing has a positive effect on local GDP and helps shore up the slowing economy resulting from an aging society. AI is an important tool for coping with the challenges of an aging society. Current AI development is an "induced innovation," and its substitutive relationship with labor is a "supplemental substitution" rather than "crowding-out substitution." If these characteristics are properly maintained, AI will contribute more to China's economy against the backdrop of an aging society.

Effectiveness of China's Labor Contract Law——Evidence from China Employer-Employee Survey

Using micro-level data from China Employer-Employee Survey(CEES), this paper conducts an empirical analysis of firms' heterogeneous characteristics in the implementation of the Labor Contract Law and its effects on employees. Our findings are as follows: With China's economic development, firms more proactively implement the Labor Contract Law, resulting in a higher percentage of employees with labor contracts. Labor contracts significantly increase the probability of employees in receiving social insurances, such as pension, health, unemployment, work injury and birth insurances, and have a significantly positive effect on wage income. Longer term of labor contract corresponds to stronger employment protection, and such an effect is highly robust. Larger firms with higher capital-labor ratios have better results in implementing the Labor Contract Law. And employees of private and labor-intensive firms have poorer coverage of employment and social protection; such firms should be given focal attention in the law's implementation.

Childbearing and Family Planning from Perspectives of Family and Women

： Every family has its demand, plan, and decision on childbearing, and a woman is the center of childbearing. Family demand and woman＇s decision on fertility lead to childbearing behavior and outcome in the low fertility era in China.

Intrinsic Rationale of Functional Distribution and Quantitative Distribution--International Experience and Reference of Income Distribution

The issue of income distribution in the modern sense emerged with the creation of the capitalist mode of production-a process characterized by income gaps, at first widening, then narrowing, and widening once again. In the classical economic stage featuring dual economy, income distribution was dominated by capital due to scarce capital and cheap labor, which led to widening income gaps. Entering the neoclassical economic stage, income distribution was dominated by the game between capital and labor due to diminishing marginal return to capital and relatively scarce labor, which led to the growing share of labor compensation and narrowing income gaps. Yet since the 1970s, the deepening of financialization of capital has once again magnified the effect of capital-dominated income distribution, which, together with working class polarization, led to another round of widening income gaps. An observation of the long-term evolution of world economic development and income distribution gives us a clearer view on the intrinsic rationale of change in income distribution: The mode of production determines the mode of distribution and functional distribution shares intrinsic consistency with quantitative distribution.

Capitalization of Productive Factors and Income Distribution Problems - Unraveling the Cruxof China＇s Income

When observing China＇s income distribution problems .from an international perspective, we find that China＇s income inequality is not much different from developed countries after primary distribution. The real difference between China and developed countries is that income inequality in developed countries will reduce greatly after income redistribution while the income inequality remains the same for China. Therefore, one can conclude that income inequality in China derives from the ineffectiveness of redistribution. However, a large income gap is not the main reason for skewed income distribution in China. In fact, the problem lies in unfair distribution resulting from factor capitalization. A handful of people have taken proceeds from public assets at the expense of all the people, which has led to social poIarization. To remove unfair distribution, China should improve its means of redistribution to narrow its income gap in order to develop a fair and reasonable pattern of income distribution.

China＇s Agricultural Modernization and Economies of Scale： Barriers and Solutions

This paper identifies three stages in China's agricultural development with reference to macroeconomic development and international experience.While the first two stages focused on ensuring food security and raising farmer's income,the current stage must give priority to modernizing agricultural production.The lack of progress in this area is due to the following reasons:diminishing return to capital as a result of small and scattered farming operation which has compromised agricultural competitiveness;agriculture is overdependent on subsidy and protection under the conventional wisdom of the uniqueness of agriculture.This paper attempts to reveal the barriers to China s agricultural modernization and proposes recommendations on reforming the land and household registration systems to increase the economies of scale and productivity.

Income Gap and the Risk of MiddleIncome Trap Facing China

International experience shows that economic stagnation and deterioration of income distribution are both the cause and effect of each other and also reinforce each other.Such a relationship may put some high-growth countries into the middle-income trap.Income levels in China are above average,but economic growth is decelerating.At such a time,China should attach great importance to addressing the widening income gap.This paper attempts to integrate official data on income with researchers' surveys to examine income distribution in China.It reveals the causes for unequal and unfair income distribution and illustrates the policy significance of reforming primary and secondary distributions to adjust the pattern of income distribution.

Forecasting China's Labor Supply and Demand and the Unemployment Structure in the 13th Five-Year-Plan Period

The changes in labor supply and demand are important factors affecting economic growth.The purpose of this paper is to predict and analyze the trends in China's labor supply and demand during the 13 th Five-Year Plan period and the longer period in the future.The scale and structure of the annual new entrants of labor force are predicted by accounting the numbers who are leaving from various stages of education.while trends of labor demand are predicted according to employment elasticity from the experience of industrialization of developed countries. The results show that, during the 13 th FiveYear Plan period.the scale of the new added labor would decrease slightly, with an average annual increment of around 15.68 million. At the same time.labor demand would increase steadily, with annually 15.42 million employment opportunities. Labor supply and demand would be roughly balanced; however,there would be increasing structural contradictions of the labor market.Based on the analysis of labor supply and demand,we provide an estimation of the unemployment scale of the 40's and 50's generations,migrant workers and college graduates,and discuss policy suggestions on promoting employment of college graduates.

Poverty alleviation through e-commerce:Village involvement and demonstration policies in rural China

The diffusion of e-commerce has played a significant role in recent rural economic development in China.E-commerce is also considered as an efficient channel to alleviate poverty in rural China.Voluminous studies have investigated the contribution of e-commerce to agricultural development,yet it is lacking empirical evidence as to the effects of e-commerce on rural poverty alleviation.Since the year of 2014,in order to develop rural e-commerce,Chinese government launched the National Rural E-commerce Comprehensive Demonstration Project.This gradual involvement policy offered a natural experiment for evaluation of e-commerce.Based on village-level survey data from rural China and Heckit method,our study finds that rural e-commerce has a significantly positive effect on rural income.Moreover,the effect is inverted U-shaped for the relative-poverty villages.The estimation of the propensity scores matching model confirms that the results are robust.The following policy recommendations are proposed:(1)policy support to rural e-commerce should prioritize the povertystricken villages.By doing so,the marginal income effects of e-commerce will be maximized.(2)Investment in internet infrastructure and establishment of human resources for e-commerce in rural areas will have spillover effects,increasing rural income through the"digital dividend".

Wage and Income Distribution in China:Review and Outlook

Under the planned economy,China’s distribution relations were relations among the state,state-run enterprises,employees and the collective economy;relations between heavy industry and light industry;and relations between cities and the countryside.After China’s transition to a market-oriented economy,the distribution relations among the state,state-run enterprises and employees evolved into distribution relations between the government,enterprises and households;the distribution relations between heavy industry and light industry evolved into distribution relations between the state sector and the private sector;and the distribution relations between cities and the countryside evolved into distribution relations between original urban dwellers and migrant populations.Wage system reform was carried out throughout the transition of these three types of distribution relations.Income distribution contradictions in China,which are a problem left over from history and intrinsic to the market-based economy,eased over the years.Some people and regions achieved prosperity,and urban-rural and interregional income gaps narrowed.However,widening household income gaps pose barriers to China’s economic sustainability and vision of building a moderately prosperous society in all respects.Mechanisms to promote common prosperity are incomplete and inadequate.The disequilibrium of functional distribution is an important cause of these income inequalities.The overall wage level of ordinary workers is low.In the future,China'should give full play to the decisive role of the market in primary distribution to ensure proper return to all types of factors,and enhance redistribution to achieve common prosperity for all its people.

Future demographic dividend——tapping the source of China’s economic growth

This paper presents a review of the demographic dividend in China’s economic growth or the contribution of the demographic factor to China’s rapid economic growth over the past 30 years. Based on this review, it explores how China has sustained high-speed economic growth in the midst of a slowdown in working age population growth, surplus labor depletion and population aging. This study intends to demonstrate that the second demographic dividend may still arise after the decline and even disappearance of the first demographic dividend to avoid demographic debt by boosting labor productivity through the furtherance of education, extending the competitive advantage of China’s industry, tapping new sources of savings through institutional arrangements of pension security, and expanding labor resource and human capital stock in the aging era through the institutional arrangements in the labor market.

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.

Balanced Regional Development in China:Demographic and Economic Distribution Mismatch

Unbalanced regional development can be examined by looking at the mismatch between demographic distribution and economic distribution across the regions.Using the indicators measuring the degree of mismatch between demographic and economic distribution of the regions in China,this paper revisits the disparities and their changes in regional development,indentifying a converging trend in the regional differences after 2003.By decomposing the regional differences into contributions of demographic and economic concentrations,this paper also explores the mechanisms of changing regional differences,and concludes that the changes of regional differences are more attributable to the effects of economic gathering than to those of demographic gathering.Demographic concentration is playing an increasingly important role in reducing the regional differences with reducing barriers to population mobility.The paper also discusses policy approaches addressing balanced regional development in China.

Intergenerational Comparative Study on Consumption of Migrant Workers in China

Based on China urban labor survey data of 2016, this paper investigates the differences in consumption level and structure between the new and previous generation rural migrant workers in China and identifies the determinants of migrant workers' consumption. According to descriptive analysis, the new-generation migrant workers' households spend 26% more on an annual per capita basis compared with their previous generation. More specifically, the new-generation migrant workers' households spend 33% more on clothing, food, housing and travel, and 10% more on healthcare on an annual per capita basis compared with their previous generation, while their per capita spending on education is only 73% that of their previous generation. Result of regression analysis shows that with other factors under control, the new-generation migrant workers' households spend 14.9% more on clothing, food, housing and travel compared with their previous generation, and their per capita gross consumption is 10.9% higher than that of their previous generation. Consumption elasticity for clothing, food, housing and travel among the new-generation migrant workers' households and their overall consumption elasticity are both significantly higher than those of the previous generation migrant workers' households. Compared with their previous generation, the spending of the new-generation migrant workers' households on clothing, food, housing and travel represents a higher share of their overall consumption, and the share of their educational consumption is even lower.