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Population aging、Urbanization and China's Economic Growth: Theoretical and Empirical Analysis
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TitlePopulation aging、Urbanization and China's Economic Growth: Theoretical and Empirical Analysis  
AuthorWang Wei and Liu Yufei  
OrganizationShanghai University of Finance and Economics; Shanghai Business School; 
Key Wordsurbanization; economic growth; population aging; savings; education investment 
AbstractNowadays, China's Urbanization Development Strategy is encountered the challenge of population ageing, whereas previous literatures about the relationship between economic growth and urbanization tend to ignore the effects of population aging. Based on this, this paper sets up a three-period overlapping generation model in an urban and rural dual economy to discuss the influence mechanisms of population ageing on urbanization and economic growth. The theory analysis implies that: (1) population ageing will reduce both the urban and rural education investment, which tends to reduce economic growth, but at the same time it will improve the urban household savings rate and reduce the rural household savings rate. In general, the role of population aging on the dual economic growth is ambiguous, depends on the parameters setting of the model; (2) urbanization helps to improve the country's economic growth and enhance the national welfare. The population ageing has a negative effect on rural human capital investment, and it will slow down the process of urbanization and weaken the economic growth effect of urbanization. We also conduct an empirical study by drawing on panel data from China's 29 provinces for the period 1995-2012.The findings support our theory predictions. 
Serial NumberWP1418 
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