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How Population Aging Affects Industrial Structure Upgrading: Evidence from China
Xiao Shen1, Jingbo Liang1, Jiangning Cao2
1School of Business, Xinyang Normal University, Xinyang 464000, China.
Population aging significantly impacts China's industrial structure. The study reveals that under a new economic environment, aging exacerbates labor shortages and alters capital, technology, consumption, investment, and export dynamics, necessitating supply-side innovation and demand-side upgrades.
Area of Science:
- Economics
- Demographics
- Industrial Economics
Background:
- Population aging presents a significant global challenge, particularly for China with its large elderly population.
- The traditional industrial structure upgrading model in China is unsustainable in the face of profound macroeconomic shifts and aging.
- Urgent transformation of China's industrial and economic development model is required.
Purpose of the Study:
- To analyze the influence mechanism of population aging on industrial structure upgrading in China.
- To provide insights for promoting industrial structure upgrading amidst population aging.
- To identify policy implications for sustainable economic development.
Main Methods:
- Construction of six Markov-switching Vector Autoregression (MSVAR) models using data from 1987 to 2021.
- Analysis of environmental perspectives and regime transition probabilities.
- Impulse-response analysis to examine the impact of population aging under different economic regimes.
Main Results:
- A clear two-regime feature in the influencing mechanisms of population aging was identified, with a significant environmental transition in 2019.
- Under the new economic regime, population aging narrows industrial structure upgrading by aggravating labor shortages.
- Population aging negatively impacts capital stock but cumulatively increases industrial structure upgrading; it weakens technological progress but strengthens its impact on industrial structure upgrading.
- Population aging forces greater consumption upgrading, weakening industrial structure upgrading, and narrows investment and export structure upgrading.
Conclusions:
- Collaborative promotion of industrial structure upgrading is essential, focusing on supply-side strategies like independent innovation and talent.
- Demand-side strategies emphasizing domestic consumption and export upgrading are crucial.
- Adapting to the impacts of population aging requires a dual approach to economic development and industrial transformation.
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