Author(s)

Changling Sun

Corresponding Author

Changling Sun

Abstract

The steady growth of the economy is the basis for the successful realization of this integration of the Yangtze River Delta. The labor supply problem caused by the aging population is becoming a potential factor threatening the economic growth in the Yangtze River Delta region. By describing the relation among population aging, labor supply and economic development, according to the panel data of 31 provinces, municipalities and autonomous regions in China, this paper uses the panel autoregressive model to empirically analyze the interaction between population aging, consumption and labor force on the economy through co-integration test, impulse response graph and variance decomposition in China and in the Yangtze River Delta. The results show that the negative impact of population ageing on economic growth and labor supply of Yangtze River Delta is greater than that of the whole country, which may be due to the choice of migrant workers to "retire to their hometowns". Because of the rapid inflow of migrants and the increase of human capital, the impact of the Yangtze River Delta's labor supply on economic growth is not significant. This suggests that efforts by increasing the supply of workers on Yangtze River Delta to mitigate the negative effects of aging on economic growth should not be focused solely on increasing the nominal supply of workers. At the same time, we should improve the quality of labor force and the demand of the pension market to increase the real supply of labour force and promote economic growth.

Keywords

Population Ageing; Panel Autoregressive Model; Pulse Effect; Variance Decomposition