5 – The Asia-Pacific century

The demographic transition a change from high to low rates of mortality and fertility has been more dramatic in East Asia during this century than in any other region or historical period. By introducing demographic variables into an empirical model of economic growth, this essay shows that this transition has contributed substantially to East Asia's so-called economic miracle. The 'miracle' occurred in part because East Asia's demographic transition resulted in its working-age population growing at a much faster pace than its dependent population during the period 1965-1990, thereby expanding the per capita productive capacity of East Asian economies. This effect was not inevitable; rather, it occured because East Asian countries had social, economic, and political institutions and policies that allowed them to realize the growth potential created by the transition. The empirical analyses indicate that population growth has a purely transitional effect on economic growth; this effect operates only when the dependent and working-age populations are growing at different rates. An important implication of these results is that future demographic change will tend to depress growth rates in East Asia, while it will promote more rapid economic growth in Southeast and South Asia.

Demographic Transitions and Economic Miracles in Emerging Asia

The demographic transition a change from high to low rates of mortality and fertility has been more dramatic in East Asia during the twentieth century than in any other region or historical period. By introducing demographic variables into an empirical model of economic growth, this article shows that this transition has contributed substantially to East Asia's so called economic miracle. The miracle occurred in part because East Asia's demographic transition resulted in its working age population growing at a much faster rate than its dependent population during 1965-90, thereby expanding the per capita productive capacity of East Asian economies. This effect was not inevitable; rather, it occurred because East Asian countries had social, economic, and political institutions and policies that allowed them to realize the growth potential created by the transition. The empirical analyses indicate that population growth has a purely transitional effect on economic growth; this effect operates only when the dependent and working age populations are growing at different rates. These results imply that future demographic change will tend to depress growth rates in East Asia, while it will promote more rapid economic growth in Southeast and South Asia.

/pdf/demographic-transitions-and-economic-miracles-in-emerging-vjsub924wn.pdf

Demographic transitions and economic miracles in emerging Asia.

Gates

This article presents empirical evidence supporting the hypothesis that the decision of Chinese rural people to migrate is affected by noneconomic forces. Using the 1820 rural household survey from Sichuan province migration behavior and earnings are analyzed. Logistic probability models show that the decision to migrate is driven largely by the availability of rural non-farm employment opportunities. However if jobs are available in the province even at lower wages rural people will choose to stay rather than to migrate. The major deterrent to migration is the lack of safety during transportation and in destination cities as well as forced separation from families. Moreover rural migrants are denied the legal right to reside permanently in cities. Furthermore findings reveal that although labor productivity in migrant activities is higher than it is in local non-farm sectors the economic cost of migration in China is so high as to significantly limit reallocation. One implication of this study is that without artificial barriers to labor migration the number of migratory workers would be higher. Since the important objective of the Chinese government is to control rural-to-urban migration it is likely that restrictive migration policies will continue. However putting aside the issue of social justice the economic efficiency loss under the Chinese system should not be ignored.

Labor Migration and Earnings Differences: The Case of Rural China

The Great Leap Forward disaster, characterized by a collapse in grain production and a widespread famine in China between 1959 and 1961, is found attributable to a systemic failure in central planning. Wishfully expecting a great leap in agricultural productivity from collectivization, the Chinese government accelerated its aggressive industrialization timetable. Grain output fell sharply as the government diverted agricultural resources to industry and imposed an excessive grain procurement burden on peasants, leaving them with insufficient calories to sustain labor productivity. Our analysis shows that 61 percent of the decline in output is attributable to the policies of resource diversion and excessive procurement.

https://faculty.darden.virginia.edu/liw/papers/JPE-final2.pdf

5 – The Asia-Pacific century

References

Demographic Transitions and Economic Miracles in Emerging Asia

Demographic transitions and economic miracles in emerging Asia.

Gates

Labor Migration and Earnings Differences: The Case of Rural China

The Great Leap Forward: Anatomy of a Central Planning Disaster

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