Economic Implications of China's Demographics in the 21st Century

February 1, 2003

Preview Citation

Format: Chicago

Kevin C Cheng. Economic Implications of China's Demographics in the 21st Century, (USA: International Monetary Fund, 2003) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This study assesses the economic implications of China's changing population in the 21st century using a numerical general equilibrium model. The simulations show that lower fertility rates yield lower saving rates. Since lower fertility rates reduce the future supply of labor, capital will become less productive. Consequently, if international capital mobility is high in China, a low fertility rate implies more future capital outflows. But if capital is less mobile, low fertility today lowers the domestic return to capital and raises the domestic return to labor. In addition, the paper finds no significant link between demographic structures and per capita income growth.

Subject: Aging, Expenditure, Gender, Labor, Population and demographics, Public expenditure review, Women

Keywords: Aging, Benchmark fertility, Capital flows, Capital mobility, Demographic structure, Fertility level, Fertility regime, Population size, Public expenditure review, Savings, Women, WP

Publication Details

Pages:

31
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2003/029
Stock No:

WPIEA0292003
ISBN:

9781451844825
ISSN:

1018-5941

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