Effects of Population Age Structure on Economic Growth in China

Abstract

It is widely believed that age structure change is one of the reasons for China’s rapid economic growth. While most of the studies have concentrated on the linear relationship between age structure changes and economic growth, this paper investigates the non-linear relationship by incorporating quadratic terms of child dependency ratio and aged dependency ratio involved through “Cobb-Douglas” production function. The results of empirical analysis on Chinese panel data of 31 provinces from1990 to 2015 reveal that age structure has significant non-linear effects on economic growth: child dependency ratio has a “Ushape” relationship with economic growth; aged dependency ratio has an “inverted U-shape” relationship with economic growth.