An analysis of the mechanism that precipitates and limits the economic ramifications of fertility decline in China
Li, J.
Chinese Journal of Population Science 8(4): 373-377
1996
ISSN/ISBN: 1044-8403 PMID: 12292591 Document Number: 384203
This article discusses the economic effects of fertility decline in China. The author argues that several considerations should be accounted for in an analysis of the economic impact of fertility decline and low fertility in China: the macroeconomic environment, the socioeconomic characteristics of the population, the impact of low fertility on consumer behavior, macro constraints on economic effects of fertility decline, and the relationship between macro and micro economic effects of fertility decline. The life course can be grouped as youth, working population, and retirement. During the youth phase, parents invest and children become human resources with an obligation to repay the investment. During the work phase, resources are directed to supporting and upgrading consumption, repaying parental investments, and savings for old age and risks. The elderly phase involves consumption and negative savings. Having fewer children creates the option of saving economic resources, such as time and money, for investment in the quality of children and themselves. Fertility decline offers the opportunity to increase labor supply and personal income through women's employment and to reduce dependency. Fertility decline advances the change in the mode of consumption to higher quality consumer goods. Fertility changes the mode of investment, the labor supply, income earning ability, allocation of personal resources, and mode of consumption. This results in increased investment in human capital, labor supply, income and savings, the increased range of consumption, and the improvement of lifestyle. The obstacles to positive economic consequences include deficits to children's ability to support themselves and their parents, the inability to meet the demand for advanced education and training, unemployment and surplus labor, and shortages of savings and development funds.