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Demographic Origins of the Great Recession: Implications for China
Author(s) -
Gomez Rafael,
Lamb Danielle
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.2013.12017.x
Subject(s) - demographic dividend , recession , china , demographic economics , economics , population , baby boom , working population , great depression , great recession , population ageing , boom , development economics , dividend , age structure , demography , labour economics , geography , macroeconomics , sociology , archaeology , finance , environmental engineering , engineering
The demographic dividend, that is, the growth of the working age population aged 16 years relative to younger and older age dependents, has often been cited as a crucial component of the accelerated economic growth experienced by disparate countries and regions at different points in time. Generally less emphasized are the ramifications of this process when it occurs in reverse; that is, when the relative size of the working age population begins to shrink. Related to this is the more subtle effect of changes to the age structure of the overall working age population, which can have compounding or offsetting effects in relation to the demographic dividend noted above. This paper explores how these age‐related phenomena were instrumental to both the Great Depression and the Great Recession of 2008. We explore how the generational composition of economic actors and the aging of the baby‐boom worker may have played a role in provoking these remarkable recessionary periods. The reversal of the demographic dividend and the aging of the working age population are factors now contributing to the propagation of the global economic downturn, as witnessed in the example of Japan over the past half‐century. This paper applies the lessons of the Great Depression to offer a forward‐looking analysis of the Chinese economy. China is on the precipice of a significant demographic shift whose implications for economic growth are explored.