Author(s)

Song Fang, Lemeng Qi, Nini Song, Zhijuan Mao^*

Affiliation(s)

School of Management, University of Shanghai for Science and Technology, Shanghai 201210, China.

Corresponding Author

Zhijuan Mao

ABSTRACT

The trend characteristics of capital income under population aging are related to investors' judgment of China's future investment environment, the effect of monetary policy regulation and the success or failure of pension system reform. In the critical period of the two centenary goals, will China's capital income enter a downward channel? To answer this scientific question, a dynamic model that can examine the impact of aging on capital income over the years. After optimizing the framework and conducting numerical simulation research based on realistic and feasible parameters, it is found that China's capital gains will enter a downward channel before 2050 under the condition that the birth policy remains unchanged. This means that there is a risk of capital outflow, and the capital engine of the Chinese economy may be underpowered; capital income will decline, and the role of monetary policy in regulating the macroeconomy will be reduced; the reform of the funded pension system is not a panacea, and personal pensions are faced with the problem of not being able to appreciate the insurance risk. Further simulations show that the adjustment of the birth policy not only increases future capital returns, but also changes the trend of declining capital returns after 2035. Therefore, it is necessary to further relax birth control and introduce birth support policies to increase the current birth level; birth policy is not only an important population policy, but may also be an important capital policy, and even a technological policy.

KEYWORDS

Baby boom; Population aging; Capital gains; Birth policy

CITE THIS PAPER

Song Fang, Lemeng Qi, Nini Song, Zhijuan Mao. Population aging, capital gains and adjustment of fertility policy. World Journal of Economics and Business Research. 2023, 1(1): 1-7. DOI: 10.61784/wjebr231118.

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