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China's low fertility may not hinder future prosperity.

ABSTRACT: China's low fertility is often presented as a major factor which will hinder its prosperity in the medium to long term. This is based on the assumed negative consequences of an increasing old-age dependency ratio: a simplistic measure of relative changing age structures. Based on this view, policies to increase fertility are being proposed after decades of birth restriction policies. Here, we argue that a purely age structure-based reasoning which disregards labor force participation and education attainment may be highly misleading. While fertility has indeed fallen to low levels, human capital accumulation has been very strong-especially among younger cohorts. Factoring in the effects of labor force participation and educational attainment on productivity, a measure called "productivity-weighted labor force dependency ratio" can more accurately capture the economic implications of demographic change. When using this ratio, a much more optimistic picture of the economic (and social) future of China can be envisaged.

SUBMITTER: Marois G

PROVIDER: S-EPMC8501780 | biostudies-literature |

REPOSITORIES: biostudies-literature

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