The Impact of Population Aging on GDP and Medical Expenditure in China

Abstract

Population aging is a major social problem in the 21st century, which is also the main feature of human social development in the new century. Since the reform and opening up in China, with the significant development of social economy and the rapid progress of medical level, the average life expectancy has been improved to a large extend, which cause that the problem of population aging has become increasingly serious. This paper takes the proportion of elderly population in China as research object, applies VAR model to analyze and forecast the data with the aim to study its impact on GDP and medical expenditure. As is well-known, it is inevitable that proportion aging will inhibit economic growth and increase healthcare spending. This paper finds that this kind of effect is not immediate. Based on this lag, in order to reduce the negative impact of population aging, suggestions for the future work of government leaders and medical practitioners can be put forward.