Demographic Transition in China and its Implications

The aim of this paper is to chart the demographic transition in China, identify its proximate causes and analyze its socioeconomic implications with reference to, first, the proportion and composition of the dependent population, second, the age structure of the labor force and, third, the size and composition of households. Defined as a steady deceleration in population growth to a nonrising total, the onset of the demographic transition in 1970 predates the one-child policy. Thus far the transition has had its largest impact on the proportion of children in the population, which has fallen. Next in magnitude is a rise of in the share of working-age adults. These two changes dwarf the rise in the share of the elderly on which much of the discussion in China tends to be focused. The crude dependency ratio has been falling and will continue to do so for another two decades or so. It is pointed out that the change in the age structure has significant distributive implications. The last 20 or so years have seen a substantial change the size distribution of households. The average household has shrunk in size from 4.5 in 1982 to 3.5. This is important because the distribution of the population into households has a significant impact on the household expenditure pattern. In particular, controlling for per capita expenditure, smaller households spend more on food per capita than do larger households.