A Study On The New Demographic Dividend And Its Influence On Economic Growth

Since the reform and opening up, China has experiencing a long period of rapid economic growth. China’s "economic miracle" has been attracted a great concern of the world scholars. Now, the research results about "East Asian miracle" show that making full use of the demographic change is an important reason of economic growth. Accompanied by the rapid economic development, China’s age structure of the population has experienced a faster transition than which East Asia has experienced.Empirical research of "East Asian miracle" has prompted many scholars contact "demographic dividend" with "China’s economic miracle". The traditional "demographic dividend" theory expounded the additional economic benefits of the demographic transition from the perspective of the total population growth and age structure, and the sample data mainly came from the developed countries, the conclusions whether can be directly copied to China is open to question. Domestic research of the macroeconomic effects caused by the demographic transition is still in the exploratory stage, most empirical studies only focuse on some indices sch as fertility, mortality, dependency ratio, but ignore the dynamic process of population growth in the strcture change, the quality change as well as the institutional change, resulting in the measure of the demographic dividend divided. How to effectively balance China’s labor market, and to ensure better harvest "demographic dividend", and to explore the potential of new "demographic dividend",and to extend the duration of the" demographic dividend " as much as possible, which is also the current to be the focus of the research topic.Since1964-2010, China’s GDP has realized an average growth of11.96%. At the same time, the productive labor age proportion of the population has increased by18.78%; the number of college students has increased by more than three times, and the illiteracy rate has dropped from33.58%to33.58%; urban employment have increased by nearly twice, rural employment increased by60%, the number of rural-to-urban labor also has increased to$10million per year. According to the relevant characteristics of the rapid demographic transition in China and the related research achievements in terms of economic growth and demographic transition, this article expounds the new concept of the demographic dividend which includes the "the proportion of labor quantity features","labor quality characteristics","labor employment structure characteristics".Therefore, this thesis put emphasis on researching the new demographic dividend and its macroecomic effects. The research is composed of the following parts:firstly, putting the urban and rural employment structure changes and human capital accumulation into the category of the new demographic dividend, and defining the concept of new demographic dividend. Secondly, according to the empirical study on the world economic growth factors, establishing model to measure new demographic dividend value.Thirdly, in order to study how the demographic dividend affect economic growth, based on the closed and open perspective, this paper establishing the conducting mechanism between demographic dividend and economic growth. Fourthly, based on economic contribution rate, this part mainly forecastes the future demographic dividend value. Fifthly, drawed lessons from the past, looked to the future situation, based on the current facts, putting forward the strategy and policy suggestions.This research innovation point is mainly manifested in three aspects:1. The innovation of theoretical perspective. Based on the related theoretical and practical research, this article first puts forward the New Demographic Dividend which includes "widening on the number of labor","deepening on the quality of Labour" and "optimization on labor employment structure", and measures its economic value.2. The innovation of research perspective. Research on economic problems not only needs to study the short-term effect, but need to focus on its long-term effect. At the same time, the internal relations between economic variables are so complex that research should try diverse perspective. In addition, the demographic factors can explain the phenomenon of "high savings, high surplus" in China well. On the analysis of the demographic dividend value, this article not only validates dividend value of the past, but focuses on the future trend of the new demographic dividend economic value. This article also proposes the short-term and long-term policy suggestions on harvesting the new demographic dividend.3. The innovation of the application perspective. The decomposition of human capital has been discussed by some scholars, while this article brings the decomposition of human capital into the demographic dividend framework for the first time. Human capital is subdivided into junior middle school and primary school education of human capital, high middle school education of human capital and university education of human capital. When researching the economic performance of demographic dividend, the sample interval is divided into two parts:1952-1978and1979-2011. This article makes use of labor participation rate data to forecast the labour population instead of employment and unemployment data. The study on demographic dividend belongs to a new research field,this article integrates relevant theories and methods of operational research, statistics, econometrics, economics and sociology to build the model of measuring the economic value of demographic dividend.The whole thesis is composed of seven chapters.Chapter1is introduction. This part explains the research background, research value and the subjects of the research. It also illustrates the methodology, the content and the framework of the research. Then we summarize the innovation of the thesis.Chaper2is about the theory background and literature review. This chapter firstly gives a review to population transition theory, population age strcture theory and economic growth theory. Then we give a systematic tintroduction about the related theoretic and empirical researches at home and abroad from three aspects: whether the demographic dividend influences economic growth, how the demographic dividend has its effect on economic growth, propose the future research direction.Chapter3is the research foundation. This chapter defines the concept of new demographic dividend, gives a preliminary analysis on population age strcture variation and the logical mechanism of its effect on economic growth.Chapter4analyzes the contribution of new demographic dividend to economic growth. First, we sort out relevant economic factors from the empirical research, and extract the main impact factors. Then, we discuss the applicability of these factors in view of China’s demographic dividend. Later, we establish model to measure the economic value of China’s demographic dividend. We use Chow’s breakpoint test to prove that economic contribution of demographic dividend is different before and after the reform and opening up.Chapter5is the demand conducting mechanism between the demographic dividend and economic growth—saving (investment) mechanism, current account balance mechanism. First of all, we analyse that how children’s dependency ratio and elderly support ratio, total dependency ratio have an influence on the saving rate under the closed environment. In order to depict the hysteresis effect of savings and the stimulus of birth population policy, we quote lagged saving ratio and a virtual variable in the model. Finally, we find that population age structure can better explain why China’s savings rate is so high. The section ii of this chapter discusses how population age structure affect the current-account balance on the open perspective, the model also include variables such as consumption, savings, investment, government payments. The results show that dependency ratio variation significantly affects the current account negatively. In the section ⅲ,we use a VECM model to discuss the population bring-up ratio, current account balance, the causal relationship between savings and economic growth from a long-term point of view. Empirical evidence shows that population age structure, savings, current account balance exist long-term effect on economic growth.Chapter6is the analysis of the demographic dividend period. Based on the economic contribution rate of new demographic dividend, this chapter forecasts the future trend of new demographic dividend. The empirical results show that the contribution which traditional demographic dividend makes to the economy will experience fluctuant falling process in the future, while the structured demographic dividend and the quality-oriented demographic dividend will make up for the inadequacy of traditional quantity-oriented demographic dividend. The new demographic dividend is expected to produce a bigger and more sustained economic impact.Chapter7is conclusion and the policy suggestions on how to use demographic dividend to promote economic growth. First, this chapter makes a conclusion on this article. Second, the section ii of this chapter mainly expounds "short-term employment measures and long-term policies","deeply releasing beneficial labor force policies ","family planning policy "and "population aging policies". Third, the section iii of this chapter is the prospect in the future.