Once growth is under way, an endogenous multiplier effect may develop, with positive feedback between economic growth and demographic change. Economic development and the demographic transition. Mar 01, 2010 a model explaining economic growth in a panel of countries over the period 1960 to 2000 tracks some key features of the economic growth spurts in china and india since 1980. We attempt to identify the impact of demographic changes on inflation and the macroeconomy by using two kinds of proxies to capture demographic changes. Geography, demography, and economic growth in africa. Demographic change and economic growth in asia harvard. 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. This paper describes how population aging will shape long run economic development in the euro zone. His current research is concerned with the economic lifecycle, intergenerational issues, and the eff ects of population change on development, economic growth, and public and private transfer systems. Identifying factors that influence the pace of national economic growth is a timeworn activity of economists.
As we are all aware, japan is a society with a rapidlyaging population caused mainly by a low birth rate. Population dynamics and economic growth in subsaharan. It is also increasingly recognized that other asian economies are soon about to follow japans path. Recent progresses in the research on population and economic growth have focused on the demographic age structure of the population. Nonetheless, the demographic dividend model can account for much variation in past economic performance among different countries and regions e. We show that the overall rate of population growth had little effect on economic growth, but that changes in life expectancy, age structure, and population density have had a significant impact on growth. Policy choices can potentiate indias realization of economic benefits stemming from demographic change. Population dynamics in india and implications for economic. 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 change and economic growth in asia bloom.
This demographic inertia is exploited in demographic projections to yield forecasts that are substantially more reliable than any projection of economic. Based on the analysis, the paper discusses whether the demographic dividend could be sustained and, if. During this period, the decline in the workingage population is likely to directly depress the economic growth rate. Population trends in asia and the pacific the population in asia and the pacific is growing at less than 1 per cent per annum in 20, the total population of the asia pacific region stood at 4.
Mellon center for curricular and faculty development, the office of the provost and the office of the president. Chapter 6 analyzes how policies can leverage demographic change in support of the development goals. Demographic change and economic growth in asia, pgda working papers 4108, program on the global demography of aging. While there are differences across countries, with some countries more affected than others, overall, the simulation results clearly indicate that. Population is one of the decisive factors shaping the pattern of chinas economic growth. Demographic transitions and economic miracles in emerging asia english abstract.
There are several reasons why the southeast asia seemed to be an interesting sample to investigate the relationship between demographic factors and economic growth in this study. Population aging and economic growth in china springerlink. The reasons behind the growth spurts as shown in the model are primarily a rise in life expectancy, a rise in trade or openness of the economy, and an increasing share of. Cid working papers from center for international development at harvard university. Demographic, employment, and wage trends in south africa. 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. Demographic change and economic growth in asia david e. First, as reported of united nations 2015 its labor force is in the third place of the world in size, just behind china and. We show that the overall rate of population growth had little effect on economic growth, but that changes. Aging, economic growth, and oldage security in asia. We reexamine the role of the demographic transition in contributing to cross. East asia appeared to be bleak because of the limited supply of agricultural land. Economists have often neglected the impact of fundamental demographic processes on economic growth.
As the growth rate of the workingage population lags that of the total population, the total dependency ratio rises. Demographic determinants of economic growth in brics and. What role did population change play in east asia s rapid economic development. Bloom, david canning and jaypee sevilla nber working paper no. While many lowincome countries in the region will continue to experience a demographic dividend, over time population aging could drag on economic growth, especially in east asia. Pdf demographic change and economic growth in south asia.
Demographic, employment, and wage trends in south africa haroon bhorat. The volume provides an overview of economic growth in east asia as well as more specific. The economic consequences of demographic change in east asia. The scholarly literature on this issue labels this view, which stresses the mixed and ambiguous impacts of population growth on economic change, revisionism. Demographic changes, migration and economic growth in the.
One volume examines the development impact of demographic change mason. Accelerating rates of population growth were also a serious concern. 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. In this new stage, a country faces a growing number of elderly retirees.
Demographic change and economic growth in asia, cid working papers 15a, center for international development at harvard university. Demographic changes in asia and japans economic and. The paper tests the impact of demographic change on chinas economic growth by using 19832008 provincial panel data. Strangely, demographic change has often been absent from consideration. The asia and pacific region is extraordinarily diverse, but all of the economies are experiencing a demographic transition with important common features related to population size, growth, and age structure. Over the period 198596, per capita economic growth averaged0. Bloom and canning 2001 are among the few who explore the effect of the demographic transition on economic growth. Sep 30, 2018 economic growth depends on productivity gains and changes to the number of people in the workforce. During the transition, rst mortality and then fertility declined, causing population growth. This paper examines the economic effects of the demographic transition in developing countries. The economic consequences of demographic change in east. In contrast, the persistent growth of human capital has supported economic growth in the recent decades. Success stories from asia forty years ago, the countries of east and southeast asia were among the most densely populated in the world. 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.
The relationship between demographic change and economic. We also find strong evidence of feedback from higher income to. On the one hand, the huge population has provided china a massive labor force, making china the factory of the world. We explore how demographic changes in the asia and pacific region are likely to influence economic growth and other features of the regional economy. In 1970s, china began to implement the family plan policy, namely onechild policy, then its fertility rate decreased substantially to about 2. As for the composition of population, multiple measures have been proposed to reflect the degree of population aging. A 1 percentage point change in the working age population increases real per capita gdp growth by 0. The industrial revolution that brought unprecedented economic growth to western europe and north america also coincided with a new epoch in population dynamics galor, 2005. With the exception of indonesias large petroleum reserves, the countries were poorly endowed in natural resources. The growth rates of the population aged 2564 are forecasted as negative, and consequently, the size of the population aged 2564 is expected to decline in the coming decades owing to fertility decline and. Thus, the impact of demographic change will be felt differently 11 average aggregate gdp annualized growth, 201530 percentage points source. Although demographic variables depend on economic development, they are still to a large extent predetermined.
Finlay harvard school of public health september 2008 draft. Demographic transitions and economic miracles in emerging asia. Demographic transitions and economic miracles in emerging. 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. 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. In 1960s, chinas total fertility rate peaked at about 6. They find that as much as onethird of east asia s economic miracle between 1965 and 1990 can be explained by.
East asia s experience is also broadly consistent with the view that population matters bloom and williamson 1998. Based on data from the world bank and using a sample of fortythree developing. It also examines the relationship between population change and economic development in particular regions of the world, including east asia, latin. Pdf population and economic growth in developing countries. Economic growth and the demographic transition david e. In most countries of the region, natural resources were limited, populations were growing, and standards of. Changes in the total size of population are captured by its growth rate. We confirm the unambiguous impact of demographic transitions on growth. Demographic transition, savings, and economic growth in china. The large energyrelated deals, special economic zones and. 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. Demographic change and fiscal sustainability in asia asian. In many of them, demographic change favors economic growth in both aggregate and per capita terms because workingage.
Impact of demographic transition on economic growth of pakistan. Econometric estimates of a growth accounting model, including demographic factors, are used to discuss the effect of demographic change on the growth rate of the economy. The per capita gdp growth and productivity has been studied by marattin and salotti 2009. Population economics course description the course will examine the economic determinants of population change and demographic behavior including household formation, marriage, child bearing and rearing, mortality and especially infant mortality and key forms of human capital investment including schooling and migration. Although there is some evidence in support of each of these expla. Using ols regressions, he found that demographic change had no impact on economic growth stability in latin america and caribbean.
This record of growth is perhaps the greatest disappointment and surprise of recent african history. Demographic change, human resources constraints and economic. Economic outlook for southeast asia, china and india 2019. China is the most populous country in the world, with its population passing the 1. In most not all of these regions the inescapable decline of workingage population will impose restrictions on future employment and economic growth. Failure to take advantage of the opportunities inherent in demographic change can lead to economic stagnation. Annual percentage change 2017 2018 2019 201923 average 201216 average asean5 countries. Population change and economic development in east asia. The most marked change is that of the mining sector. Economic growth itself will be correlated to the age structure of the population. It examines policy opportunities at both the country and the global level.
They argue that it is possible that the interaction of economic growth with population dynamics can result in a poverty trap. The purpose of the thesis is to examine how demographic transition affects economic growth with the japanese economy as an extreme example. Impact of demographic changes on inflation and the macroeconomy. This paper examines the links between demographic change and economic growth in asia during 196590. The effect of population aging on economic growth, the. Department of economics university of wisconsin fall 2012 james r. The east asian countries adopted strong family planning programs, fertility rates dropped rapidly, population growth slowed and economic development accelerated. Bloom and canning 2005 studied global economic change and its economic significance. The demographic transition a change from high to low rates of mortality and fertility has been more dramatic in east asia during the twentieth century than in any other region or historical period.
I increases or e declines in history, the first case is more important to understand the impressive population growth demographic transition components of population growth. Since 1990, east asia has undertaken major economic reforms in response to financial crises and other factors. In this paper, we will interpret chinas economic growth miracle from the viewpoint of demographic change. We argue that the extent of the demographic changes. The contribution of population health and demographic change.
Demographic change, human capital, and economic growth in. The results of the study are reported in two volumes. We show that the overall rate of population growth had little effect on economic growth, but that changes in life expectancy, age structure, and population density have had a significant impact on growth rates. The effects of the demographic transition on economic growth. Demographic change and economic growth in asia, cid working papers 15, center for international development at harvard university. Demographic age structure and economic development. A reliable answer to the question is important because the extraordinary economic record of east asian countries during their highgrowth era 196090 is central to current development policy debates. Population aging and economic growth in asia david e. The authors use a simple stylized model and national transfer accounts data set to simulate the effect of asia s population aging and economic growth on the regions fiscal sustainability. 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. Walker social science 6462 page 1 population economics course description the course will examine the economic determinants of population change and demographic behavior including household formation, marriage, child bearing and rearing, mortality and es. Pdf demographic change and economic growth in asia.
1135 414 288 1535 1464 261 399 61 700 580 1410 640 1630 1587 837 1423 301 825 203 1011 1326 330 1536 1563 963 268 1205 1190 475 977 1421 508 882 1252 1553 19 875 1009 366 1418 701 754 478 1011 405 654