Can Adjustments of China's Family Planning Policy Truly Relieve Pressures Arising from Population Aging?

AbstractThe family planning policy has been implemented in China for three decades and leads to the rapid population aging. At the end of 2013, the Chinese government announced a significant adjustment to the family planning policy, which allows couples to have two children if one spouse is an only child. However, people still hope for relaxation of the restriction: allowing couples to have two children without any limits due to increasing concerns that the rapid population aging will produce a heavy economic burden on families and society, and have a big impact on economic development of the whole country. This paper aims to investigate whether further loosening the family planning policy can truly relieve the pressure from population aging based on the scenarios that the second child could be allowed in different stages. Results indicate that the adjustment of the family planning policy at current stage may not efficiently ease the social and economic burden brought by population aging, but rather worsen population burden to China's economy over the long term. In addition, the cumulative dependency ratio over 50 years also suggests that it is not an economically appropriate option to adjust current fertility policy. In response to the upcoming severe aging, accelerating the construction of a sound old-age social service system may be more important than the fertility policy adjustment.Keywords: China, population aging, total fertility rate (TFR), family planning, population simulationJEL Classification: J11, J13, J14, J18(ProQuest: ... denotes non-US-ASCII text omitted.)(ProQuest: ... denotes formulae omitted.)1. IntroductionSince the1 980s, the family planning policy in China has been widely promoted and implemented (Festini and Martino, 2004), which successfully controls rapid population growth and provides a good population environment for economic development. After decades of efforts, the development mode of Chinese population has achieved a historic transformation by around 2000, from high birth, death, and growth rates to low birth, death, and growth rates (Merli and Smith, 2002; Yardley, 2008). Since the beginning of the new century, the low fertility level is not only sustained and consolidated, but has also moved to ultra-low fertility level (Retherford et al., 2005). However, the rapid transition from high to low fertility rate also leads to rapid population aging (Isabelle, 2002; Chen and Liu, 2009; Cheng and Hu, 2011).China's population aging has distinguishing features compared to other countries (Li et al., 2011). The first, the process of population aging and economic development occur simultaneously in China. However, for other aging countries, population aging happens after they have had a highly developed economy and entered a stable period. In other words, aging after getting rich is the feature of population aging in the developed countries. On the contrary, aging before getting rich is the feature of China's population aging. The second, the aging process in China is extremely fast. Because the transition from high to low fertility rate occurs under government intervention and enforcement in China, the whole society maintains a highly consistent action and rarely fluctuates. As a result, the rapid fertility rate decline inevitably leads to extraordinarily rapid aging. The third, China's aging population occurs on a large population base. According to the sixth nationwide population census in 2010, the total population for mainland China exceeded 1.3 billion. That means Chinese society will also be saddled with a heavy aging population burden under the situation of large population, which has put tremendous stress on environmental resources (Feng, 2005).Considering the rapid and irreversible development trend of China's population aging and current stage of economic development, there has been increasing concern whether rapid population aging on such big scale and high speed will produce a heavy burden on the society, and have a big impact on economic development of the whole country and social stability (Vaupel and Zeng, 1991). …