THE IMPACT OF CHANGES IN THE WORKING-AGE POPULATION ON CHINA'S ECONOMIC DEVELOPMENT: FROM THE PERSPECTIVE OF INDUSTRIAL STRUCTURE UPGRADING

Abstract

The study employs a panel dataset comprising 31 provinces in China over the period from 2000 to 2022 to empirically analyze the relationship between changes in the working-age population and China’s economic growth, with a particular focus on the mediating and threshold roles of industrial structure upgrading. Empirical results demonstrate that the working-age population ratio exerts a statistically significant positive effect on economic development (β = 0.183, p < 0.01). Mediation analysis reveals that industrial structure upgrading fully mediates this relationship: the effect of WA_ratio on GDP growth becomes insignificant when ISU is introduced into the model (Sobel test statistic = 3.45, p < 0.01). Moreover, the threshold regression model identifies a critical value of 0.42 for the industrial upgrading index. When ISU is below this threshold, the marginal impact of the working-age population on GDP growth is relatively modest (β = 0.112); however, when ISU exceeds the threshold, the effect strengthens substantially (β = 0.267). These findings suggest that the positive demographic impact on economic growth is conditional upon the degree of industrial advancement. Industrial structure upgrading not only channels the benefits of a large labor force more effectively but also enhances economic resilience in the face of demographic pressures. Therefore, policy recommendations include: (1) accelerating industrial upgrading through technological innovation and service-sector development; (2) enhancing human capital investment to improve labor productivity; (3) promoting differentiated labor policies at regional levels to optimize demographic resources; and (4) integrating demographic planning with long-term economic strategies to sustain high-quality growth.

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