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Moderator:  Calla Wiemer (calla.wiemer@acaes.us)

Does Population Ageing Pose an Imminent Threat to China's Growth?

Co-authors: Wong Koi Nyen; Goh Soo Khoon

A large and young labor force has been instrumental in China's economic growth for several decades. The age structure of the population is shifting, however, with the population in the working age range of 15 to 64 declining steadily since 2015. A decades-long fertility rate of below replacement level and increasing life expectancy have produced a dramatic ageing of the population. Despite the government's introduction of pro-birth policies, the fertility rate remains low in 2023 at 1.7 per woman. The shrinking workforce is putting upward pressure on wages causing China to lose the low-cost advantage that has propelled its growth for so long. The rapid “graying” of the workforce over the next decade raises concerns about the future pace of economic growth. Such concerns were galvanized in 2022 when China's population declined year on year from 1.4126 billion to 1.4118 billion.

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Child Penalty amid Korea's Declining Fertility

Co-author: Inkyung Yoo.
 
With the gender gap in educational attainment narrowing, “child penalty” – the effect of parenthood on labor market outcomes – is considered the largest remaining obstacle in eliminating the gender pay gap in developed countries. Recent studies show that women’s earnings drop significantly following first childbirth whereas men’s earnings remain largely unaffected. Various policies are being discussed and studied with the goal of reducing the child penalty.

However, from an individual woman's perspective, there is a sure way to avoid the child penalty – to not have any children. Among OECD countries, the fertility rate is indeed lower in places with societal characteristics associated with heavier child penalties, such as less generous family policies, more traditional gender norms, and inflexible labor markets. But cross-country correlations do not provide insight into how the child penalty might evolve as childlessness increases. Would the child penalty also decline in low-fertility regions, leading to convergence across both gender and countries? Or could a large child penalty affect the composition of mothers so as to further increase the child penalty?

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