This paper focuses on two major elements of Chinaâ€™s population dynamics â€“ the rising proportion of workers in the population and the shift of rural workers from agriculture to industry and services â€“ in a provincial-level analysis of per capita income and productivity growth during the last three decades. We measure the "mechanical" contributions of these dynamics to per capita income as revealed by growth decompositions, before assessing the deeper population determinants of per capita income and productivity in a series of growth regressions. Our results indicate that lower levels of rural dependency and the sectoral shift in employment have both made significant positive contributions to per capita income and aggregate productivity growth. However, the negligible impact of Chinaâ€™s changing age structure combined with the negative impact of changing sectoral employment on industrial productivity growth suggest that the benefits of these population dynamics to Chinaâ€™s economic performance have been overstated.
|Crawford School of Public Policy
|Published - 2013