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The two‐way interaction between population aging and industrial transformation

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  • Jingxian Zou
  • Rundong Ji
  • Rui Mao

Abstract

This study examines the relationship between the labour‐force age structure and industry composition in a multi‐region and multi‐sector framework. Relying on a panel dataset of Chinese provinces, the simultaneous equations model reveals two‐way influences between age and industrial structures. Population aging induces a (an) reduced (increased) secondary‐sector (tertiary‐sector) employment share. The industrial structure then changes the age structure of the local labour force via the migrations of young workers as non‐agricultural sectors expand. With an improved Leslie model, we predict a province‐level population aging and industry structure trend. Accordingly, municipalities, developed coastal provinces and the three northeastern provinces face greater pressure from population aging and a rapid structural, industrial transformation. Further considerations of the ‘two‐child policy’ via simulation results show that relaxed birth restrictions could slow population aging in some but not all these provinces.

Suggested Citation

  • Jingxian Zou & Rundong Ji & Rui Mao, 2022. "The two‐way interaction between population aging and industrial transformation," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 30(2), pages 311-335, April.
    • Handle: RePEc:wly:ectrin:v:30:y:2022:i:2:p:311-335
    DOI: 10.1111/ecot.12295
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