Analysis of the Impact of Aging on Factors Affecting Economic Dynamism

Abstract

Population aging is one of the biggest demographic challenges facing China in the 21st century. Its impact on the economy cannot be ignored. This study employs empirical research to illustrate how population aging affects China's economic development. It is mainly explained from the perspectives of the labor force, savings rate, GDP, and pension insurance participation. According to the relevant data and the definition standard of the United Nations on aging society, the relevant data from 2002 to 2020 are selected for empirical analysis. The conclusion is obtained through the ADF test, determination of optimal lag order, the AR characteristic root test, and impulse response analysis. The results display that from the perspective of GDP and savings rate, population aging has an inhibitory effect on the economy, and has a lasting negative impact on the labor force. These results suggest that some measures should be taken to deal with the effects of aging in order to counteract its negative impacts on the economy and society.