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Economic Implications of China's Demographics in the 21st Century

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  • Kevin C. Cheng
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    Abstract

    This study assesses the economic implications of China''s changing population in the 21st century using a numerical general equilibrium model. The simulations show that lower fertility rates yield lower saving rates. Since lower fertility rates reduce the future supply of labor, capital will become less productive. Consequently, if international capital mobility is high in China, a low fertility rate implies more future capital outflows. But if capital is less mobile, low fertility today lowers the domestic return to capital and raises the domestic return to labor. In addition, the paper finds no significant link between demographic structures and per capita income growth.

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    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 03/29.

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    Length: 31
    Date of creation: 01 Feb 2003
    Date of revision:
    Handle: RePEc:imf:imfwpa:03/29

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    Related research

    Keywords: Capital flows; Savings; Aging; Economic models; fertility; fertility rates; children per woman; fertility rate; number of children; lower fertility; birth rate; low fertility; birth; population size; mortality rate; childbearing; demographic structures; population growth; fertility levels; total fertility rate; high fertility; adult population; fertility level; age group; childbearing age; population distribution; birth rates; baby boom; life table; demographics; population structure; population composition; age groups; family planning; baby boomers; low fertility rates; demographic profiles; population statistics; low fertility rate; historical population; age distribution; population data; mother; malthusian view; demography; young people; population projections; demographic trends; demographic changes; population changes; age distributions; age structure; aging population; malthusian theory; maternal age; population structures;

    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Robin Brooks, 2000. "What Will Happen to Financial Markets When the Baby Boomers Retire?," IMF Working Papers 00/18, International Monetary Fund.
    2. Robin Brooks, 2000. "What Will Happen To Financial Markets When The Baby Boomers Retire?," Computing in Economics and Finance 2000 92, Society for Computational Economics.
    3. Eckstein, Zvi & Wolpin, Kenneth I., 1985. "Endogenous fertility and optimal population size," Journal of Public Economics, Elsevier, vol. 27(1), pages 93-106, June.
    4. Barro, Robert J & Becker, Gary S, 1989. "Fertility Choice in a Model of Economic Growth," Econometrica, Econometric Society, vol. 57(2), pages 481-501, March.
    5. Alan J. Auerbach & Laurence J. Kotlikoff, 1984. "An Examination of Empirical Tests of Social Security and Savings," NBER Working Papers 0730, National Bureau of Economic Research, Inc.
    6. Johnson, D. Gale, 1999. "Population and economic development," China Economic Review, Elsevier, vol. 10(1), pages 1-16.
    7. Alwyn Young, 2000. "Gold into Base Metals: Productivity Growth in the People's Republic of China during the Reform Period," NBER Working Papers 7856, National Bureau of Economic Research, Inc.
    8. Bakshi, Gurdip S & Chen, Zhiwu, 1994. "Baby Boom, Population Aging, and Capital Markets," The Journal of Business, University of Chicago Press, vol. 67(2), pages 165-202, April.
    9. Ríos-Rull José-Víctor, 2001. "Population Changes and Capital Accumulation: The Aging of the Baby Boom," The B.E. Journal of Macroeconomics, De Gruyter, vol. 1(1), pages 1-48, May.
    10. James M. Poterba, 2001. "Demographic Structure And Asset Returns," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 565-584, November.
    11. Steven A. Symansky & Peter S. Heller, 1997. "Implications for Savings of Aging in the Asian "Tigers"," IMF Working Papers 97/136, International Monetary Fund.
    12. Razin, Assaf & Ben-Zion, Uri, 1975. "An Intergenerational Model of Population Growth," American Economic Review, American Economic Association, vol. 65(5), pages 923-33, December.
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