Hitting the Great Wall: Structural change and China's growth slowdown

China is facing slowing growth rates, slowing rates of rural to urban migration and resistance to reforms that would liberalize internal migration restrictions (Hukou). We use a two sector Ramsey growth model and show that, allowing for endogenous capital accumulation, labour reallocation has accounted for approximately one fifth of China's per capita GDP growth over the last 30 years, and that Hukou reform could generate a significant boost to China's per capita GDP growth over the next decade. Our results contrast with conclusions drawn from the traditional growth accounting literature on labour reallocation effects in China because our simulation method allows for endogenous capital accumulation dynamics.     

Population dynamics and economic growth in China

This paper focuses on two major elements of China's population dynamics—the rising proportion of workers in the population and the shift of rural workers from agriculture into industry and services—in a provincial-level analysis of per capita income and productivity growth during the last three decades. We measure the ‘mechanical’ contributions of these dynamics to per capita income as revealed by growth decompositions, before assessing the determinants of per capita income and productivity growth in a series of regressions that include the growth of the working-age to total population (WAP) ratio and a measure of sectoral employment change. Our results indicate that sectoral change has made a significant positive contribution to both per capita income growth and aggregate productivity growth, stemming from its positive impact on agricultural productivity growth—as predicted by the Lewisian dual economy model. However, the negative impact of sectoral change on productivity growth in the industrial and service sectors, combined with the negative impact of growth of the WAP ratio on both per capita income and aggregate productivity growth, suggests that the benefits of China's population dynamics during the last three decades have been overstated.     

International trade,FDI (foreign direct investment) and embodied CO2 emissions: A case study of Chinas industrial sectors

This paper calculates CO₂ emissions embodied in China's international trade using an input–output analysis, for the period 2000–2010. Based on industrial panel data, the two-step GMM estimation is used to test the impacts of FDI, trade openness, exports, imports and per capita income on CO₂ emissions. The results suggest that: (1) China's growing trade surplus is one of the important reasons for the rapidly rising CO₂ emissions; (2) large FDI inflows further aggravate China's CO₂ emissions; and (3) the industrial sector's per capita income and CO₂ emission relationship show inverted-U environmental Kuznets curve. Therefore, in order to achieve environmentally sustainable development of the economy, China should make efforts to transform its trade growth mode, adjust foreign investment structure, strengthen energy efficiency and develop a low-carbon economy.     

A Bite of China: Food consumption and carbon emission from 1992 to 2007

In conjunction with the rapid rise in household food expenditures per capita, China's food consumption has increased greatly. At the same time, dietary patterns have changed dramatically, as between 1992 and 2007 China underwent a transition to a more animal-based westernized diet. This rise in food consumption and shift in dietary structure may contribute substantially to climate change. In this paper, an input-output model is used to explore the food-related carbon emissions of Chinese urban households in 1992 and 2007. The results indicate that the physical volume of and economic expenditures on food consumption have increased by 20.7% and 35.9%, respectively. However, food-related carbon emissions per capita in 2007 had decreased nearly 21% compared to emissions in 1992. Based on parametric estimates of environmental Engel Curves and the Oaxaca-Blinder decomposition, the variation in household income may lead to a hypothetical carbon emissions increase of 1.694 tons. However, the improvement in energy use efficiency had offset the impact from income growth and dietary transition and led to the drop in China's food-related carbon emissions from 1992 to 2007.     

Projecting meat and cereals demand for China based on a meta-analysis of income elasticities

There are many projections for China's food demand, and the projection results differ significantly from each other. Different values for income elasticities could be a major reason. This study projects meat and cereals demand for China based on a meta-analysis of the income elasticity estimates using a collection of 143 and 240 income elasticity estimates for cereals and meat products, respectively, from 36 primary studies. We find that income elasticities for most cereals (general cereals, rice, and coarse grains) and all meat products (general meat, pork, poultry, beef & mutton) tend to decline as per capita income increases, except for wheat, which increases. Taking this into account, differences between consumption projections based on time-varying income elasticities and values based on constant elasticities are substantial in quantities and increase over time.     

The aggregate gains of eliminating gender and ethnic gaps in the Malaysian labor market

We use microdata to calculate the gains of eliminating gender and ethnic labor market gaps in Malaysia for the period 2010–2017. We document significant gaps in terms of participation in the labor market and entrepreneurship, distinguishing between employers and self-employed. Female-male ratios are 64% for labor market participation, 82% for self-employment, and 32% for being employers. Across different age and ethnic groups, gender gaps in labor force participation are particularly pronounced for older workers and in entrepreneurship for Chinese workers. Our results indicate substantial income gains if gender and ethnic gaps were eliminated. Eliminating the entrepreneurship gender gaps increases income per capita by 6.54% in the long run. When we also include the employment gender gap, the long-run gains are 26.18%. The elimination of ethnic gaps could in the long run result in a smaller but still sizeable increase in income per capita of 11.5%.     

Regional disparity and economic growth in China: The impact of labor market distortions

The paper tries to analyze China's regional disparity in a framework of convergence in neoclassical theory of growth. We employ comparative productivity of agricultural labor as an index of labor market distortion to see the impact of difference of labor market maturity among regions on regional growth performance, controlling for a set of variables determining growth rate. The finding is that (1) there is an evidence of conditional convergence in China's growth, namely, per capita GDP in the initiative year is negatively related to growth rates in following years, (2) labor market distortion negatively impacts regional growth rates, and (3) many other variables used at previous studies impact growth performance, as is expected by neoclassical theory of growth.     

Does the Domestic Value Added Induced by China＇s Exports Really Belong to China？

Since 2001, the exports of foreign‐invested enterprises (FIEs) have accounted for more than 50 percent of China's total exports. As foreign capital occupies a high proportion of the total capital of FIEs, most FIEs' capital gains are foreign factor income. Although these gains are calculated as a part of China's GDP, they do not belong to China's national income. To determine the real contribution of exports to China's welfare, the present paper analyses the impact of exports on China's national income using a non‐competitive input–output model capturing processing trade. The results show that every US$1000 of China's exports generates US$506.8 of national income. The real contribution of exports to China's welfare is much smaller than what we expected. This suggests that China should endeavor to improve the gains from international markets or find another engine to maintain its economic growth.     

Education expansion,assortative marriage,and income inequality in China

In this paper, we study the pattern of assortative marriage in China since 1990 and its impact on income inequality. The results indicate that men in China are increasingly likely to marry women of similar education levels. We calculate the counterfactual income inequality that would prevail if marriages were randomly matched in terms of education. In 2005, China's overall Gini coefficient of household income per capita would decline from 0.512 to 0.476 if marriages were randomly matched. In urban areas, assortative marriage in education increased the Gini coefficients from 0.321 to 0.338 in 2009. The decomposition exercise shows that the rising returns to education contribute most to the increase in income inequality in urban areas between 1990 and 2009, while the change in marriage assortativeness plays a minor role.     

Why was Australia so rich?

Between 1870 and 1890 Australian incomes per capita were 40 percent or more above those in the United States. About half this gap is attributable to Australia’s higher labor input per capita, and half to its higher labor productivity. The higher labor input is due in part to favorable demographic attributes and partly to a favorable workforce participation rate. The higher productivity results from an advantageous natural resource endowment. By 1914 the income lead over the U.S. had all but disappeared due to declines in Australia’s advantages both in labor input per capita and in labor productivity.     

Dynamics of Income Distribution across Chinese Provinces during 1978–98

This study attempts to examine the growth pattern of China's economy during 1978–98 from the perspective of income distribution dynamics. Motivated by the model of dynamic distribution, a transition matrix is derived from a panel of ratios of provincial real incomes to national averages across 30 provinces over 1978–98. The transition matrix is used not only to reveal the transitions of provinces between the states of income over time, but also to predict whether there is a tendency across provinces to converge in real income per worker in the long run. This study finds evidence of a slight reduction of income dispersion across Chinese provinces over 1978–98. However, the slight reduction of income dispersion is not strong enough for the provinces to converge to mean income. But there is a strong tendency to converge across provinces within regions and it is evident that, in the eastern region, poor provinces caught up with rich ones over the period under study. The long-run distribution indicates that there will not be a tendency to converge in real GDP per capita across provinces in the long run.     

How Does Trade Openness Affect Regional Demographic Transitions? Evidence from China's Provincial Panel Data

This paper investigates the effect of trade openness and other variables on the demographic transition in China using the instrumental variables regression method based on provincial panel data for the period between 1981 and 2013. The results indicate that trade openness is one of the determinants of China's demographic transition and has two distinct effects: (i) an income effect that accelerated the demographic transition by increasing per capita income; and (ii) a human capital effect that suppressed the demographic transition by reducing human capital accumulation. The effects of trade on demographic transition vary across different regions. This study identifies the important determinants of demographic transition in China's regions, and has rich policy implications for demographic transition and the upgrading of trade structure.     

How is suicide different in Japan?

This study investigates suicide rates among OECD countries, with particular effort made to gain insight into how suicide in Japan is different from suicides in other OECD countries. Several findings emerged from fixed-effect panel regressions with country-specific time-trends. First, the impacts of socioeconomic variables vary across different gender–age groups. Second, in general, better economic conditions such as high levels of income and higher economic growth were found to reduce the suicide rate, while income inequality increases the suicide rate. Third, the suicide rate is more sensitive to economic factors captured by real GDP per capita, growth rate of real GDP per capita, and the Gini index than to social factors represented by divorce rate, birth rate, female labor force participation rate, and alcohol consumption. Fourth, female and elderly suicides are more difficult to be accounted for. Finally, in accordance with general beliefs, Japan's suicide problem is very different from those of other OECD countries. The impact of the socioeconomic variables on suicide is greater in Japan than in other OECD countries.     

老龄化背景下中国商业健康保险的社会保障作用研究

商业健康保险具有缓解社会保障支出的作用,对于社会保障具有积极影响。基于老龄化背景下针对中国商业健康保险的社会保障作用进行研究。研究结果发现当人均商业健康保险的保费收入增加时,全国社保基金中的人均医疗保险支出将可因此显著减少,这说明中国商业健康保险的发展有助于缓解社会保障支出,从而能够减轻政府财政支出的负担和压力,与当前政府所提倡的积极发展商业保险,从而推进"健康中国"的战略计划实行的政策相符。     

A Tale of Two Peripheries: Real Wages in Denmark and New Zealand 1875–1939.

Abstract

Denmark achieved dramatic real wage growth after 1870, compared to other European economies and to those of the New World. The ingredients of Denmark's success are gauged by comparison with one its major competitors in the British food-products markets, New Zealand. Faster Danish productivity growth explains only part of Denmark's faster real wage growth. Open economy forces, chiefly international capital flows before 1913, and especially Danish trade union militancy around the end of World War I, influenced income distribution and especially favoured wages over property income in Denmark. Denmark's GDP per capita equalled New Zealand levels between the world wars but her real wages surged past those of New Zealand as distributional shifts favoured Denmark's wage earners.     

Human capital estimates in China: New panel data 1985–2010

We introduce new provincial level panel data on human capital in China from 1985 to 2010. Our estimation of human capital is based on the Jorgenson–Fraumeni lifetime income approach modified to fit the Chinese data, thereby allowing a more comprehensive measurement of human capital than traditional partial measurements, such as education. Our provincial data are adjusted for purchasing power parity via a living-cost index as well as for real values so that all values are comparable across the provinces and time. We discuss various characteristics of the data, including total human capital, per capita human capital, and labor force human capital, which in turn are disaggregated based on gender and urban or rural location. Our human capital estimates are compared with the provincial physical capital estimates and provincial GDP. As an illustration, we also use the data to estimate a production function and to decompose China's economic growth from physical capital, human capital, and TFP. Our results, compared with those that use traditional specifications, reassure us as to the reliability of our new China human capital data.     

Impact of demographic dynamics on food consumption — A case study of energy intake in China

Most existing studies of food demand focus on economic factors, such as income and price. Physical factors which determine human energy intake requirement, given economic conditions, such as gender and age structures of the population as well as occupation, are usually not incorporated. While this is appropriate in the situation of a continuous, stable development of demographic structure, it might lead to biased result if drastic and irregular demographic changes have taken place. This paper provides a case study of China of the impact of demographic dynamics on the change of physical requirement and energy intake demand. The unique population pyramid in China, resulted from the big famine in the early 1960s and then the “One Child” policy” starting from the 1980s, has led to the irregular evolution of age groups and the consequent changes in the proportion of the “big-eaters”. As a result, given food price and income, the very age structure of the population at the time affects the overall weighted energy intake level of the population significantly. Using household survey data ranging from year 1991 to 2009, the index of Adult Male Equivalent Scale (AMES) is constructed to reflect the varying per capita physical requirement resulted from the demographic dynamic over the years in China. The AMES index, together with food price and income, has been applied to the per capita energy intake model. The empirical results show that the AMES index has statically strong impact on per capita energy intake, and the inclusion of the AMES index into the model has improved the model fitness. This finding sheds light on a possible way for improvement in projecting China's food demand in the future by incorporating the country's changing demographic factors.     

Labor Market Reform, Income Inequality and Economic Growth in China

The year 1996 was a turning point both in terms of Chinese labor market reform aria m China＇s economic growth pattern. Before 1996, labor market reform was mainly implemented through adjustment of people＇s occupation and income structure. Since 1996, employment restructuring has led to differentiation in terms of employment status. Labor market reform in the former stage resulted in slow growth in wages, whereas reform in the latter stage enhanced economic efficiency. Both stages have enabled the Chinese economy to apply its comparative advantage of low labor cost. Labor market reform has also increased income disparity and, therefore, new challenges are posed in sustaining economic growth. China needs to adjust its development strategies and introduce labor market reform that can improve income equality, so as to achieve sustainable economic development.     

Chinese Regions in the Great Divergence: Provincial Gross Domestic Product per Capita, 1873–1918

We construct 1912/18 Chinese provincial gross domestic product per capita from primary sources and project cross‐sections for 1873 and 1893. The results fit the historical record. We hypothesise that regionally specific conflicts have a role to play in explaining differential growth rates, and that geography, governance, and sectoral structures explain relative income‐level rankings. China's richest provinces matched Europe's poorest. A divergence did indeed occur, but our estimates show that at a broader economic level, it was perhaps not as dramatic as some of the literature implies.     

Balance sheet expansion and economic growth in China: Crowd in or crowd out?

Balance sheet expansion is crucial to understand the historic path, current slowdown and future trend of economic growth in China. As the financial system transforms national savings into investment, balance sheet expands simultaneously. According to changing impacts of balance sheet expansion on real economy, economic growth in China from 1998 to 2016 can be divided into the crowd-in stage and the crowd-out stage. In the first stage (1998–2007), balance sheet expansion crowded China's real economy in, raised TFP dramatically and accelerated economic growth. In the second stage (2008–2016), balance sheet expansion crowded China's real economy out, with stagnant TFP and decelerated economic growth. Balance sheet expansion has slowed down since 2014, but it continues to exert crowding out effects on China's real economy. We argue that balance sheet expansion is crucial for China's future economic growth. In the long term, structural reforms, especially reforms in the financial system, could increase growth potential significantly. In the short term, financial system reforms should focus on generating sufficient cash flows to boost aggregate demand.