The impact of accelerating population aging on service industry development: Evidence from China

The demographic structure is an important factor influencing the development of the services industry. As the country with the world’s most serious aging problem, China’s service industry structure is likely to undergo profound changes in response to the rapid demographic transition. Therefore, this paper examines the effect of population aging on the development of the service industry in the context of China’s accelerating population aging. The study found that: (1) Population aging has a significant "inverted U" effect on the development of the services industry. (2) The impact of population aging on the development of the service industry has obvious regional and industry heterogeneity. The study of regional heterogeneity found that population aging in economically developed regions has a more obvious effect on the development of the service industry than in economically less developed regions. Industry heterogeneity studies found that population aging has an obvious promotional effect on the development of medical and other rigid demand industries, while the effect on other non-rigid demand industries is not significant. (3) The threshold effect test found that when the degree of population aging exceeds the threshold, the stimulating effect of population aging on the development of the services industry is no longer significant. The research in this paper provides useful insights into the likely response to changes in the industrial structure of the services industry, and offers some implications for countries with similar demographic profiles to China.