Demographic transition and economic growth: Evidence from China and United States

In the context of todays ageing population, this paper uses the connectedness network model proposed by Diebold and Yilmaz in 2014 to analyse the directionality and degree of interaction between the population ageing index, life expectancy, per capita gross domestic product, and per capita health expenditure from a systematic perspective for China; then, these results from China are compared with the United States. A number of new findings can be identified, as follows: (1) for China and the United States, economic growth may promote the growth of health expenditure and increased life expectancy may cause an increase in the ageing population; (2) China's population age structure has already led to some constraints on economic growth, whereas the United StatesUS's population age structure has had a weak impact on its economic growth; and (3) the ageing population structure for China has a net impact on per capita health expenditure, whereas no such net directional impact was found in the United States. These findings support the idea that policy synergies should be strengthened in the economic, social, and health fields in order to promote both the quality of life of the ageing population and the sustainable development of the economy.