Original scientific paper

https://doi.org/10.1080/1331677X.2021.1977671

Does low birth rate affect China’s total factor productivity?

Xiang Li
Xindong Zhao

Abstract

This study uses the DEA-Malmquist method to measure total factor productivity by employing the provincial panel data from
1998 to 2017 in China and constructing a panel data model to
test the relationship between birth rate and human capital and
the influence of labour in different age groups on total factor
productivity. It was found that the increase in the birth rate has a
significantly negative effect on human capital accumulation, while
the effect of the birth rate on human capital shows an inverted
‘U’ shape. That is, when birth rate decreases, human capital
increases, and when birth rate increases, human capital decreases.
Thus, too low or too high birth rates will reduce human capital.
Ultimately, human capital accumulation will significantly promote
the growth and decomposition of total factor productivity. The
effect of the labour age structure on total factor productivity also
shows an inverted ‘U’ shape. Labour between 40 and 49 years old
contributes the most to the promotion of total factor productivity.
Eventually, due to the low birth rates, the proportion of 50-
59 years old will keep at high level. Therefore, total factor productivity will decline significantly

Keywords

Low birth rate; human capital; labour age structure; total factor productivity

Hrčak ID:

302476

URI

https://hrcak.srce.hr/302476

Publication date:

31.3.2023.

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