introduction to paper

introduction to paper - population Around the period...

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Econ339 Prof: S.Habermalz Chunyi Zhang Abstract The impact of population aging on China’s labor market China’s labor market has transitioned into a market-oriented one in the past three decades. Moreover, the cheap labor has benefited China in labor-intensive industry exports to other countries. It may seem that the supply of lower-skilled laborers is still in abundance. However, since the beginning of 1970s, the dramatic fertility decline has decelerated the growth of China’s working age population. From 2015, this growth will turn sharply negative, resulting declining labor force in China. This trend will develop faster and become more severe due to a number of factors including the strict one child family planning policy and the imbalance in male-female ratio. The proportion of the population aged 65 and older will reach seven percent before the end of this decade. It is also estimated that the growth rate from 2000 to 2030 will be 32.1 per 1000 for the elderly population while it is only 5.1 per thousand for the overall
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Unformatted text preview: population. Around the period 2025-2030, the proportion of the elderly will reach 15 percent of the total population. Due to the rapidly aging population problem in China, the advantage as a low-cost labor market could be eroded. That is to say, there will be fewer people in the working age and more retirees. The economy will suffer more pressure to support the elder people while encounter a decreasing surplus of labor, especially the lower-skill labor. This paper analyzes the negative effects of population ageing on China’s labor market. (e.g., Peng, 2006 and Golley and Tyers, 2006). Peng’s simulation results show that the labor force decline caused by population aging and low fertility rate will decelerate China’s economic growth by two percentage points annually during the 2020s and by three percentage points annually during the 2040s (Peng 2006)....
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