Open AccessChina's low fertility may not hinder future prosperity
Author(s) -
Guillaume Marois,
Stuart GietelBasten,
Wolfgang Lutz
Publication year - 2021
Publication title -
proceedings of the national academy of sciences of the united states of america
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 5.011
H-Index - 771
eISSN - 1091-6490
pISSN - 0027-8424
DOI - 10.1073/pnas.2108900118
Subject(s) - prosperity , fertility , dependency ratio , economics , educational attainment , productivity , human capital , china , demographic economics , factoring , total factor productivity , total fertility rate , labour economics , development economics , economic growth , population , demography , political science , sociology , family planning , finance , law , research methodology
China's low fertility is often presented as a major factor which will hinder its prosperity in the medium to long term. This is based on the assumed negative consequences of an increasing old-age dependency ratio: a simplistic measure of relative changing age structures. Based on this view, policies to increase fertility are being proposed after decades of birth restriction policies. Here, we argue that a purely age structure-based reasoning which disregards labor force participation and education attainment may be highly misleading. While fertility has indeed fallen to low levels, human capital accumulation has been very strong-especially among younger cohorts. Factoring in the effects of labor force participation and educational attainment on productivity, a measure called "productivity-weighted labor force dependency ratio" can more accurately capture the economic implications of demographic change. When using this ratio, a much more optimistic picture of the economic (and social) future of China can be envisaged.