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End of the First Demographic Dividend and Possible Labor Market Response in China and Other Asian Countries
Author(s) -
Ogawa Naohiro,
Chen Qiulin
Publication year - 2013
Publication title -
china and world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.815
H-Index - 28
eISSN - 1749-124X
pISSN - 1671-2234
DOI - 10.1111/j.1749-124x.2013.12016.x
Subject(s) - demographic dividend , china , dividend , nexus (standard) , economics , demographic economics , order (exchange) , development economics , labour economics , population , geography , demography , finance , sociology , archaeology , computer science , embedded system
This paper sheds light on the nexus of age compositional shifts and the generation of the first demographic dividend over the past several decades in China, and also discusses how this dividend could be extended We first estimate how long China's first demographic dividend will last and then compare the computed results for China with those for other selected Asian countries in order to place the Chinese case in a wider perspective. Furthermore, in view of the possibility that China's first demographic dividend will turn negative in 2014, we offer insight into how and to what extent China's labor market needs to adjust and how much labor income must increase for the first demographic dividend to remain positive up to year 2050. For this goal to be achieved, the labor income age profile needs to be shifted to a considerable extent. We conduct an exercise in which the 2007 peak labor income age of 32 years is shifted to 40 years. In the case of the elderly, this implies an annual labor income growth of 3.1 percent over the period of 39 years. Throughout this paper, we draw on a variety of computed results derived from the Chinese component of the global “National Transfer Accounts” project.