An Analysis Of The Impact Of Low Fertility On China's Economic Growth

Since the implementation of the family planning policy,China's population fertility has been declining,below the level of generational change now.Sustained low fertility not only reduces the total population,but also brings about labor shortage,accelerated population ageing and other problems,affecting the long-term development of the economy.With the change of population structure,it is urgent to clarify the theoretical relationship between low fertility and economic growth under the background of low fertility,and to analyze the relevant mechanism of influence.Based on research,this paper established the relevant theory and mechanism,tries to explain the effect of low fertility on economic growth from both theoretical and empirical,and makes a rational and objective assessment of the direct effect sesame and intermediate effect of low fertility on economic growth.In the process of concrete research,this paper will proceed along the logical idea of “asking questions-theory and mechanism analysis-empirical test-analysis of fertility policy adjustment-conclusions and countermeasures”.After study,the main conclusions of this paper are as follows:Firstly,analysis of the effects of low fertility on labor supply.It is concluded that the increase of fertility will promote the increase of labor participation rate.And the increase of child-rearing ratio brought by low fertility will increase the labor participation rate.After considering the lag effect of low fertility,it is found that the negative effect of low fertility on labor participation rate will be further enhanced by the lag effect.At the same time,after analyzing and forecasting the future labor supply at different fertility levels,it is found that if the fertility continues at the current low level,the total number of working-age people in China will be about 7.67 million fewer by 2030 than under the fertility programme,which is maintained at natural replacement.This difference will widen further after 2040 and 2050.In addition,the effect of low fertility on the size of labor supply reflects not only an absolute reduction,but also an acceleration in the rate of reduction over time.Secondly,analysis of the effects of low fertility on human capital.It is concluded that the accumulation of human capital increases when fertility declines.From the perspective of eugenics,the positive effect of fertility on human capital is gradually emerging as fertility continues to decrease.After considering the lag effect of low fertility,it is found that the human capital will not only be affected by the current fertility,but also by the lag effect of previous fertility.In addition,in the regional difference analysis,it is found that the change of fertility has the greatest effect on human capital in the Western region.According to the regression of the effect of human capital on total factor productivity under low fertility.It is found that the improvement of human capital has a significant positive effect on promoting the growth of total factor productivity.In other words,in the context of low fertility,the level of human capital will increase,which will facilitate the growth of total factor productivity.Thirdly,the direct effect of changes in fertility on economic growth presents a significant reversal of the “U”.That is,when fertility at a low level,economic growth will rise as fertility rise,but when fertility rises to a certain level,continued rise will have a significant negative effect on economic growth.At the same time,in the analysis of the lag effect,it is found that the economic growth will also be affected by the lag effect of the previous fertility.In the analysis of intermediate effect,on the one hand,low fertility will reduce labor participation rate by changing the level of labor supply,and then have negative intermediary effect on economic growth.on the other hand,low fertility will also improve labor productivity by changing the level of human capital input,and then have positive intermediary effect on economic growth.However,under the current situation of insufficient investment in education and unreasonable structure,the negative intermediary effect of labor participation rate is slightly higher than the positive intermediary effectof human capital,after the generational change of population in the next ten years or more.Thus,we analyze the impact of low fertility on economic growth from the supply approach and still have a negative effect.Fourth,according to numerical simulations,the inverted “U” shaped relationship between fertility and economic growth.It is further evidence of empirical analysis of the previous analysis.And when the aggregate fertility reaches 1.6,the rate of economic growth peaks,but when fertility continues to1.8,the rate of economic growth is 1.65.It back to the result of the fertility at1.5.It suggests that if the implementation of the current two-child policy or further liberalization of the fertility policy can promote fertility in the range of 1.5-1.8,it can promote high economic growth.Thus,under the current low fertility,the moderate growth of fertility is conducive to economic growth after adjustment in fertility policy.But the excessive rebound of fertility is not conducive to economic growth.In addition,analyzing the factors of the influence factors of the residents' fertility intention after the relaxation of the fertility policy,we found that the difference between the individual's age,sex,household registration and education level is obvious.At the same time,after the relaxation of the fertility policy,families that have not yet had two children more clearly the “two-child” birth plan affected by the policy.In a word,the effect of low fertility on macroeconomic growth is two-way and phase.With the change of population,the negative effect of low fertility on China's economic growth is gradually appearing.Therefore,it is urgent to raise the fertility,adjust the age structure of population and improve the quality of labor supply.