Population Aging、Urbanization and China’s Economic Growth

Nowadays, China’s urbanization development strategy is encountered the challenge of population aging, whereas previous literatures about the relationship between economic growth and urbanization tend to ignore the effects of population aging. Based on this, the paper constructs a new analytical framework that integrates development economics with endogenous economic growth theory, and sets up a three-period overlapping generation model in an urban and rural dual economy with population aging to discuss the influence mechanisms of population aging on urbanization and economic growth. The theory analysis implies that: (1) population aging will reduce rural saving rate and education investment, which tends to reduce economic growth, but at the same time it will has an uncertain impact on the urban household savings rate and education investment. 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 aging has a negative effect on rural human capital investment, reduce rural-to-urban migration rate, 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 1995-2017. The findings support our theoretical predictions. This research enriches and develops the existing theory, and helps to understand the urbanization and economic growth power of China from the perspective of population transformation.