The Impacts of Population Aging on China’s Economy

Yuan Ho Hsu, Hiroshi Yoshida, Fengming Chen

研究成果: Article同行評審


The Chinese economy had an extraordinary average GDP growth rate of 8.50 percent from 1980 to 2018. However, the implementation of one-child policy in the late 1970s has depressed the total fertility rate to below the replacement rate since 1992. China thus experienced an increasing composition of older populations in the past three decades, which puts pressure on Chinese economic growth and makes its eye-catching economic growth potentially unsustainable. This study develops an overlapping generations (OLG) model to investigate the impacts of this demographic transition in the Chinese economy. This study conducts six policy reform exercises to examine measures that could improve the sustainability of fiscal and pension systems. The simulation results indicate that a mild tax increase on either wage income or consumption does not improve the fiscal stance but creates distortionary effects on saving and consumption behaviors. Of the pension reform measures considered, the combination of extending the mandatory retirement age and cutting the replacement ratio offers the most significant improvement to pension sustainability. However, increasing the contribution rate of the working-age population has the least effect on pension sustainability and a noticeable distortionary effect on the consumption ratio and saving rate.

頁(從 - 到)105-130
期刊Global Journal of Emerging Market Economies
出版狀態Published - 2022 1月

All Science Journal Classification (ASJC) codes

  • 全球和行星變化
  • 商業與國際管理
  • 地理、規劃與發展
  • 發展
  • 經濟學、計量經濟學和金融學(雜項)


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