Population Pessimism and Economic Optimism in the Asian Giants

30 Pages Posted: 21 Nov 2012

See all articles by Jane Golley

Jane Golley

Australian National University (ANU) - Faculty of Economics & Commerce; Australian National University (ANU) - Crawford School of Public Policy

Rod Tyers

Australian National University (ANU) - School of Economics; The University of Western Australia - Department of Economics

Date Written: November 2012

Abstract

The timing of China’s and India’s demographic transitions and the implications of alternative fertility scenarios are explored here using a global economic model incorporating full demographic behaviour and measures of dependency that accurately reflect the changing proportion of workers, rather than working‐aged, in the total population. The baseline scenario confirms that demographic change in India may yield significant gains to future real per capita income, resulting from a continuing sharp decline in its total dependency ratio. For China, these gains are largely in the past, although the positive contribution of declining youth and working‐aged dependency to future per capita income will continue to offset the negative impact of rising aged dependency through to 2030. Whilst a policy change to foster higher fertility rates and hence more rapid population growth in China might ultimately ease its dependency burden, in the short run it will increase it. In any case, such a course is contradictory to the goal of delivering improvements in real per capita income. For India, we confirm that the benefits of further fertility reductions, in the form of increased real per capita income, are substantial.

Suggested Citation

Golley, Jane and Tyers, Rod, Population Pessimism and Economic Optimism in the Asian Giants (November 2012). The World Economy, Vol. 35, Issue 11, pp. 1387-1416, 2012. Available at SSRN: https://ssrn.com/abstract=2178888 or http://dx.doi.org/10.1111/twec.12003

Jane Golley (Contact Author)

Australian National University (ANU) - Faculty of Economics & Commerce ( email )

Canberra, Australian Capital Territory 2601
Australia

Australian National University (ANU) - Crawford School of Public Policy

ANU College of Asia and the Pacific
J.G. Crawford Building, #132, Lennox Crossing
Canberra, Australian Capital Territory 0200
Australia

Rod Tyers

Australian National University (ANU) - School of Economics ( email )

Arndt Building
Australian National University
Canberra, Australian Capital Territory 0200
Australia
61-6-249-5124 (Fax)

The University of Western Australia - Department of Economics ( email )

35 Stirling Highway
Crawley, Western Australia 6009
Australia
61 8 6488 5632 (Phone)

HOME PAGE: http://www.business.uwa.edu.au/school/staff-profiles?type=profile&dn=cn%3DRodney%20Tyers%2Cou%3DEcon

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