Demographic Change and the Labour Supply Constraint
China’s economic growth has, hitherto, depended on its relative abundance of production labour and its increasingly secure investment environment. Within the next decade, however, China's labour force will begin to contract. This will set its economy apart from other developing Asian countries where relative labour abundance will increase, as will relative capital returns. Unless there is a substantial change in population policy, the retention of China’s large share of global FDI will require further improvements in its investment environment, in its factor productivity and/or in its labour force participation rates. The links between demographic change, labour participation rates and growth performance are explored here using a new global demographic model that is integrated with an adaptation of the GTAP-Dynamic global economic model in which regional households are disaggregated by age and gender. China’s share of global investment, and hence its growth rate in per capita terms, is found to depend sensitively on its labour force growth and this, in turn, depends on both fertility and labour force participation. Rates of aged participation are low in China but likely to increase and this could offset the growth-retarding effects of fertility decline and ageing.
|Date of creation:||Jun 2006|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +61 2 6125 3807
Fax: +61 2 6125 0744
Web page: http://rse.anu.edu.au/
More information through EDIRC
References listed on IDEAS
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.:
- Grilli, Enzo R & Yang, Maw Cheng, 1988. "Primary Commodity Prices, Manufactured Goods Prices, and the Terms of Trade of Developing Countries: What the Long Run Shows," World Bank Economic Review, World Bank Group, vol. 2(1), pages 1-47, January.
- Jörg Mayer, 2002.
"The Fallacy of Composition: A Review of the Literature,"
The World Economy,
Wiley Blackwell, vol. 25(6), pages 875-894, 06.
- Jörg Mayer, 2003. "The Fallacy Of Composition: A Review Of The Literature," UNCTAD Discussion Papers 166, United Nations Conference on Trade and Development.
- Fleischer, Belton M. & Yang, Dennis T., 2003. "Labor laws and regulations in China," China Economic Review, Elsevier, vol. 14(4), pages 426-433.
- Steven A. Symansky & Peter S. Heller, 1997. "Implications for Savings of Aging in the Asian "Tigers"," IMF Working Papers 97/136, International Monetary Fund.
- Chu Junhong, 2001. "Prenatal Sex Determination and Sex-Selective Abortion in Rural Central China," Population and Development Review, The Population Council, Inc., vol. 27(2), pages 259-281.
- Liu, Jing & Nico van Leeuwen & Tri Thanh Vo & Rod Tyers & Thomas W. Hertel, 1998. "Disaggregating Labor Payments by Skill Level in GTAP," GTAP Technical Papers 314, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
- Hussain, Athar, 2002. "Demographic Transition in China and its Implications," World Development, Elsevier, vol. 30(10), pages 1823-1834, October.
- John Giles & Albert Park & Fang Cai, 2003. "How has Economic Restructuring Affected China’s Urban Workers?," William Davidson Institute Working Papers Series 2003-628, William Davidson Institute at the University of Michigan.
- Robert D. Retherford & Minja Kim Choe & Jiajian Chen & Li Xiru & Cui Hongyan, 2005. "How Far Has Fertility in China Really Declined?," Population and Development Review, The Population Council, Inc., vol. 31(1), pages 57-84.
- Rod Tyers & Jane Golley, 2006. "China's Growth to 2030: The Roles of Demographic Change and Investment Premia," PGDA Working Papers 1206, Program on the Global Demography of Aging.
- Rod Tyers & Ian Bain & Jahnvi Vedi, 2006.
"The global implications of freer skilled migration,"
ANU Working Papers in Economics and Econometrics
2006-468, Australian National University, College of Business and Economics, School of Economics.
- Rod Tyers & Iain Bain & Jahnvi Vedi, 2006. "The global implications of freer skilled migration," PGDA Working Papers 1006, Program on the Global Demography of Aging.
- Sir H. W. Singer, 1998. "Beyond Terms of Trade: Convergence/Divergence and Creative/Uncreative Destruction," Zagreb International Review of Economics and Business, Faculty of Economics and Business, University of Zagreb, vol. 1(1), pages 13-25, May.
- Guangyu Zhang & Zhongwei Zhao, 2006. "Reexamining China's Fertility Puzzle: Data Collection and Quality over the Last Two Decades," Population and Development Review, The Population Council, Inc., vol. 32(2), pages 293-321.
- Rod Tyers & Qun Shi, 2006. "Global Demographic Change, Labour Force Growth and Economic Performance," ANU Working Papers in Economics and Econometrics 2006-462, Australian National University, College of Business and Economics, School of Economics.
- Cai Fang & Wang Dewen, 2005. "Demographic transition: implications for growth," Labor and Demography 0512001, EconWPA.
When requesting a correction, please mention this item's handle: RePEc:acb:cbeeco:2006-467. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.