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Contrasting Giants: Demographic Change and Economic Performance in China and India

  • Jane Golley

    (The Australian Centre on China in the World Australian National University)

  • Rod Tyers

    (UWA Business School, The University of Western Australia)

The timing of China’s and India’s demographic transitions and the implications of alternative fertility scenarios are here explored using a global economic model incorporating full demographic behavior and measures of dependency that include the working aged and those of working age who do not work. The results show that, while the path of total dependency in China will be comparatively flat, the positive contribution of declining youth dependency to real per capita income will not be offset by rising aged dependency until beyond 2030. India’s dependency ratio declines more sharply. Its higher initial fertility contributes positively to growth in GDP while weakening that in its real per capita income. Yet, so long as fertility continues to decline the latter negative effect will be partially offset by a demographic dividend worth at least five per cent of its 2000 real per capita income over more than three decades.

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Paper provided by The University of Western Australia, Department of Economics in its series Economics Discussion / Working Papers with number 11-04.

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Length: 40 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:uwa:wpaper:11-04
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  1. David E. Bloom & David Canning & Günther Fink & Jocelyn E. Finlay, 2007. "Fertility, Female Labor Force Participation, and the Demographic Dividend," NBER Working Papers 13583, National Bureau of Economic Research, Inc.
  2. Charles Yuji Horioka & Junmin Wan, 2007. "The determinants of household saving in China: a dynamic panel analysis of provincial data," Working Paper Series 2007-28, Federal Reserve Bank of San Francisco.
  3. Marcos D. Chamon & Eswar S. Prasad, 2010. "Why Are Saving Rates of Urban Households in China Rising?," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(1), pages 93-130, January.
  4. Rod Tyers & Jane Golley & Bu Yongxiang & Ian Bain, 2006. "China's Economic Growth and its Real Exchange Rate," ANU Working Papers in Economics and Econometrics 2006-476, Australian National University, College of Business and Economics, School of Economics.
  5. Charles Yuji Horioka, 2009. "The (Dis)saving Behavior of the Aged in Japan," ISER Discussion Paper 0763, Institute of Social and Economic Research, Osaka University.
  6. Robert M. Schmidt & Allen C. Kelley, 1996. "Saving, dependency and development," Journal of Population Economics, Springer;European Society for Population Economics, vol. 9(4), pages 365-386.
  7. 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.
  8. Kelley, Allen C & Schmidt, Robert M, 1996. "Saving, Dependency and Development," Journal of Population Economics, Springer;European Society for Population Economics, vol. 9(4), pages 365-86, November.
  9. 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.
  10. David E. Bloom & David Canning, 2004. "Global demographic change : dimensions and economic significance," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, issue Aug, pages 9-56.
  11. Zoë Matthews & Sabu Padmadas & Inge Hutter & Juliet McEachran & James Brown, 2009. "Does early childbearing and a sterilization-focused family planning programme in India fuel population growth?," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 20(28), pages 693-720, June.
  12. Franco Modigliani & Shi Larry Cao, 2004. "The Chinese Saving Puzzle and the Life-Cycle Hypothesis," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 145-170, March.
  13. Rod Tyers & Iain Bain, 2008. "American and European Financial Shocks: Implications for Chinese Economic Performance," ANU Working Papers in Economics and Econometrics 2008-491, Australian National University, College of Business and Economics, School of Economics.
  14. David E. Bloom & David Canning & Michael Moore, 2004. "The Effect of Improvements in Health and Longevity on Optimal Retirement and Saving," NBER Working Papers 10919, National Bureau of Economic Research, Inc.
  15. Rod Tyers & Jane Golley, 2010. "China's Growth to 2030: The Roles of Demographic Change and Financial Reform," Review of Development Economics, Wiley Blackwell, vol. 14(s1), pages 592-610, 08.
  16. 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.
  17. Charles Yuji Horioka, 2010. "Aging And Saving In Asia," Pacific Economic Review, Wiley Blackwell, vol. 15(1), pages 46-55, 02.
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