As the asiapacific region is facing rapid demographic change, it is essential that population dynamics are taken into account in the formulation of development policies. The paper tests the impact of demographic change on chinas economic growth by using 19832008 provincial panel data. Demographic transitions and economic miracles in emerging asia. Demographic change and economic growth in asia cid working paper no. This paper examines the links between demographic change and economic growth in asia during 196590. Demographic change, human resources constraints and economic growth april 2015 i 2 human resources constraints will affect economic growth in the eu, the us, china and other global players. Real gdp growth in southeast asia, china and india annual percentage change. During the transition, rst mortality and then fertility declined, causing population growth.
Demographic change and economic growth in asia david e. The world population is growing more slowly and aging at unprecedented speed. Demographic changes in asia and japans economic and. Comment on demographic change and economic growth in asia. Okuns law may not be entirely predictive, but it can help frame the discussion of economic growth, how employment influences it, and vice versa. Bloom, david canning and jaypee sevilla nber working paper no. These findings confirm that rapid economic growth in asia can be attributed to the favorable demographic changes that took place there. Demographic transitions and economic miracles in emerging asia david e.
Pdf the impact of population change on economic growth. For comparing the economic growth of different countries gdp is measured in purchasing power parity ppp terms. National transfer accounts data set to simulate the effect of asia s population aging and economic growth on the regions fiscal sustainability. In this study, we have selected brazil, russia, india, china and south africa brics and the european union to see this relationship between two variables economic growth and demographic dividend using fixed effect model covering a period of 19902015. Demographics and development in the 21st century initiative. Pdf demographic change and economic growth in asia. Pdf identifying factors that influence the pace of national economic growth is a timeworn activity of economists. Migration and population change drivers and impacts. Demographic change and economic growth in asia harvard. East asia s experience is also broadly consistent with the view that population matters bloom and williamson 1998. The potential for a demographic dividend remains strong in many countries in the region, but requires that appropriate measures are put in place. In 20, the total population of the asiapacific region stood at 4.
Population aging and economic growth in china springerlink. Demographics and development in the 21st century initiative technical background paper how demographic change affects development by rachel nugent and barbara seligman the center for global development is an independent, nonprofit policy research organization that is. Demographic change will also affect saving, investment, and capital flows, implying changes in global trade balances and asset prices. We also explore the sensitivity of the results to assumptions about future productivity growth and country external risk for the developing country region. Finlay harvard school of public health september 2008 draft. These results imply that future demographic change will tend to depress growth rates in east asia, while it will promote more rapid economic growth in southeast and south asia. In this new stage, a country faces a growing number of elderly retirees. This paper examines the impact of demographic transition and economic growth of pakistan by using the time series data over the time period of 1974 to 2011. This has portrayed the economic leap forward, which elevated the position of some asian countries in the world, was contributed by the enormous alteration in demography. The bidirectional causality in south east asia abstract this study has demonstrated new evidence sustaining the idea that variation in demographic factors is an important determinant of growth in per capita income. Demographic transition and economic growth in china, india. The deducted result of the theoretical model shows that the share of workingage population is positively correlated with economic growth, whereas birth rate has an adverse impact. We reexamine the role of the demographic transition in contributing to cross country differences in economic growth through to 2005, with a particular focus on.
Asia s populations have grown rapidly in the last halfcentury. In this report we present an in depth analysis on demographic change and economic growth and contrast our findings with the results in the epc report 2005. Bloom, david canning, linlin hu, yuanli liu, ajay mahal, and winnie yip bloom, canning, liu, and mahal are faculty at the harvard school of public health. In this paper, we reexamine the role of the demographic transition in explaining crosscountry differences in economic growth, with a particular focus on east asia. Demographic change and fiscal sustainability in asia.
The growth rate of the worlds population peaked in 19651970, when it was increasing by 2. Since then, the pace of global population growth has slowed by half, falling below. The clearest prerequisite for translating demographic opportunity into sustained economic growth or sustaining growth in the face of unfavorable demographic change is a demand for available labor, along with conditions enabling that labor to be productive. Economic growth and the demographic transition david e. Demographic change, human resources constraints and economic. Three centuries of fundamental change ronaldlee b efore the start of the demographic transition, life was short, births were many, growth was slow and the population was young. Given the lack of population records prior to the 1950s, there are many gaps in our record of demographic history. The report examines the trends and levels of key demographic indicators for african countries, including population size, growth rate, distribu. Mellon center for curricular and faculty development, the office of the provost and the office of the president. The demographic dividend accounts for onesixth of chinas growth in 19892004. Demographic dividend, as defined by the united nations population fund unfpa means, the economic growth potential that can result from shifts in a populations age structure, mainly when the share of the workingage population 15 to 64 is larger than the nonworkingage share of the population 14 and younger, and 65 and older. However, for the period from 2000 to 2009, threefifths 60. Population, wealth, and economic growth in the asia and pacific.
Andrew mason1 the twentieth century was a period of unprecedented demographic change. Market reforms create the policy environment for reaping the demographic dividend. The relationship between demographic change and economic. Demographic determinants of economic growth in brics and. Emerging demographic trends in asia and the pacific. Population dynamics and economic growth in subsaharan. Demographic change, economic growth, and poverty in the growth, and poverty in the developing world developing world edited by nancy birdsall, allen c. We explore how demographic changes in the asia and pacific region are likely.
The effect of population aging on economic growth, the. An increase in this share can also come about by a disproportionate increase in the survival of. African countries united nations economic commission for. Historical demographers must make do with estimates. It also examines the relationship between population change and economic development in particular regions of the world, including east asia, latin. This is an appropriate assumption in steadystate, but during the demographic transition, labor force growth and population growth diverge for decades with important implications for growth in per capita income. From 1960 to 2000, the region experienced a major population boom, with most countries doubling in size.
In this paper, we examine the robustness of demographic factors in explaining economic growth throughout asia, with particular attention to east asia. Trade openness, high savings rates, human capital accumulation, and macroeconomic policy only accounted for part of the 19651990 growth performance in east asia. Birth rates, population growth and the economy a report by jack martin, director of special projects. Demographic change and economic growth in asia econpapers. While there are differences across countries, with some countries more affected than others, overall, the simulation results clearly indicate that demographic change will adversely affect asia s. Demographic change and economic growth in asia wiley online. Fertility rates are declining, however, which means this exponential growth will not be sustained in the medium to long term. As the growth rate of the workingage population lags that of the total population, the total dependency ratio rises. We reexamine the role of the demographic transition in contributing to cross.
Population aging and economic growth in asia 65 in fertility that reduces the number of youth, and thus with no change in the size of the elderly population, the elderly share increases. Development in an era of demographic change profound changes in global demography are expected to a. The contribution of population health and demographic. We argue that the extent of the demographic changes. Does the classic demographic transition model provide a useful framework for evaluating demographic change in contemporary developing countries. Is the socioeconomic change experienced by industrialized countries a prerequisite or a consequence of demographic transition. The east asian countries adopted strong family planning programs, fertility rates dropped rapidly, population growth slowed and economic development accelerated.
What have we learned from the east asia experience. Economic outlook for southeast asia, china and india 2019. An aging population coupled with a declining birthrate points to a decline in economic growth. Population aging, economic growth, and economic security in asia 1 sang hyop lee, andrew mason, and donghyun park 2 population, wealth, and economic growth in asia and the pacifi c 32 andrew mason and sang hyop lee 3 impact of population aging on asia s future growth 83 donghyun park and kwanho shin 4 population aging and aggregate. Demographic changes, migration and economic growth in the. Authors personal copy demographic change and economic growth in sweden. The economic consequences of demographic change in east asia, pages 6189, national bureau of economic research, inc. Sep 30, 2018 an aging population coupled with a declining birthrate points to a decline in economic growth. Sep 29, 2004 the world economic outlook presents the imf staffs analysis and projections of economic developments at the global level, in major country groups classified by region, stage of development, etc. The economic consequences of demographic change in east asia. But new thinking and evidence have highlighted the powerful contribution that demographic change can make to economic growth, and this line of inquiry has some salient implications for understanding past growth in south asia and assessing and shaping its future prospects. Population aging and economic growth in asia, nber chapters, in. Pdf demographic change and economic growth in south asia. Syud amer ahmed, pinyi chen, marcio cruz and bryce quillin.
The economic consequences of demographic change in east. This paper describes how population aging will shape long run economic development in the euro zone. Economic growth itself will be correlated to the age structure of the population. In most of the economic literature economic growth of a country is measured by growth of gross national product gdp per capita of that country taken as a proxy of standard of living. Economic growth has significant feedback effects on demographic behaviors. Still, it may be the case that such growth is not sustainable, is discounting the future eating the capital of mother earth second, in the longrun, population growth and economic growth. Demographic change and economic growth in south asia. Demographic history is the reconstructed record of human population in the past. Investment and government spending are likely to offset substantial weakness in trade. Demographic transitions and economic miracles in emerging. Subsequently, demographic change was shown to be a missing factor in explaining the east asian growth premium. But throughout the region demographic change continues. Population change and components of population growth 4.
The debate on the relationship between population growth and economic growth has been undergoing and varies across countries. Since 1990, east asia has undertaken major economic reforms in response to financial crises and other factors. Within asia, east asian countries such as japan, south korea, and china experienced some of the highest growth rates of real income per capita in the world. In the original solow formulation, the population is not distinguished from the labor force. Demographic change and fiscal sustainability in asia asian. We show that the overall rate of population growth had little effect on economic growth, but that changes in life expectancy. This is an important issue as the timing of demographic transition in asia largely coincided with the economic miracle bloom and. Demographic change and economic growth with focus on the brics philip schellekens lead economist, dec prospects group with thanks to. Special attention is paid to population health and age structure as missing factors in a unified explanation of such disparate phenomena as east asia s economic miracle and subsaharan africas economic debacle. Population aging could serve as a drag on economic growth as the eff ective number of workers declines relative to the eff ective number of consumers. The global population increased nearly fourfold, growing from 1.
Changes in the age structure of the population create potential for faster economic growth, a phenomenon referred to as the demographic dividend. In most not all of these regions the inescapable decline of workingage population will impose restrictions on future employment and economic growth. Demographic change and economic growth in asia ideasrepec. Abstract trade openness, high savings rates, human capital accumulation, and macroeconomic policy only accounted for part of the. The economic consequences of demographic change in east asia assembles a group of experts to explore such topics as comparative demographic change, population aging, the rising cost of health care, and specific policy concerns in individual countries. The first theory states that population growth stimulates economic growth. Demographic change and economic growth in asia bloom. Please do not cite without permission from the authors abstract in 1994 the world bank called east asia s strong economic growth performance a miracle.
Strangely, demographic change has often been absent from consideration. The contribution of population health and demographic change to economic growth in china and india david e. Aging, economic growth, and oldage security in asia. The volume provides an overview of economic growth in east asia as well as more specific. The population in asia and the pacific is growing at less than 1 per cent per annum. These conclusions are important for the theoretical understanding of the economic growth and the demographic transition processes, and our results confirm the theory in kalemliozcan 2002 on the. We reexamine the role of the demographic transition in contributing to crosscountry differences in economic growth through to 2005, with a particular focus on.