Future Population Dividends: New Sources of Economic Growth

Abstract

Population played an important role in China's high-speed economic growth during the implementation of the reform and opening up policy, namely because the population was both large and grew quickly. The demographic dividend is defined as a rise in the rate of economic growth due to a rising share of working-age people in a population. This chapter discusses the second demographic dividend from the perspective of the labor supply and savings ratio. It also discusses the conditions necessary for the second demographic dividend, as well as how to avoid the vacuum phenomenon between the first and second dividends. The aging population not only reflects the proportional changes among different age groups, but also the increase in life expectancy. The demographic dividend has a positive influence on two economic growth aspects, the savings ratio and the labor supply; the factor of human capital is contained within the labor supply. Keywords: China's economic growth; human capital; labor productivity; life expectancy; population dividends; retirement age