China's Demographic Transition And Its Effects On The Economy

Based on background of great health improvement while somehow just passableeconomic growth during the planned economy period and the implementation of thefamily planning policy, this dissertation tries to combine analysis on behaviors ofChinese individual consumption and investment in human and physical capital underChina's demographic transition, with finally trying to explore the effects of thisdemographic transition on China's economy from macroeconomic prospects. Thedissertation follows the logic of first macro phenomena then micro parameters andfinally macro modeling, and simultaneously adopts methods in applied statistics,applied econometrics and theoretical macroeconomic modeling, and learns fromprospects of the sociologic and economic analysis.The empirical parts of this dissertation shows that life expectancy and populationage structure both have statistically significant effect on economic growth, andasynchronous demographic transitions make fine contributions to unbalanced regionaleconomic development among China's counties. Meanwhile, normal and Weibulldistributions can well simulate and forecast the probability distribution of age at death,of which is one of the key factors for changes in China's population age structuresamong years. In addition, fast growing working-age population during the first round ofdemographic transition which is helpful for fast economic growth since thereform-and-opening-up policy in China and the aging population in future are bothclosely related with the trends in right shift and increasingly leptokurtic pattern of thisdistribution, which means deaths tend to occur at older ages and is also commonlyreferred as "rectangularity of survival curves".The theoretical parts of this dissertation later consider the dynamic transition pathof longevity on economic growth, whether the high savings rate and investment rate inrecent years are reasonable in China and possible effects of China's demographictransition on the economy. Conclusions point out that the intrinsic logic behind whyprolonging longevity promotes growth is that it is continuously high improvement rate,not just the initial high level, of life expectancy that determines the level of steady-stateeconomic growth rate. Secondly, this dissertation concludes that although China has watched high savings and investment rates in recent years, of which also are consideredas the extremely important factors for assuring China's rapid growth, this virtuous circleof high savings rate, high rate of investment and high growth rate of the economy isactually due to drastic improvement on productivity, of which is partly due to fastgrowing working-age population and great improvement on relative labor productivityoriginating from changes in age-structures during the first round of China'sdemographic transition. These theoretical parts conclude with an extended multi-perioddynamic over-lapping-generations model to derive various kinds of effects ofdemographic transition on the macro economy in China.