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The world’s second largest economy has boomed,
but a rapidly aging labor force presents substantial challenges
China experienced significant economic progress
over the past few decades with an annual average GDP growth of approximately
10%. Population expansion has certainly been a contributing factor, but that
is now changing as China rapidly ages. Rural migrants are set to play a key
role in compensating for future labor shortages, but inequality is a major
issue. Evidence shows that rural migrants have low-paying and undesirable
jobs in urban labor markets, which points to inefficient labor allocation
and discrimination that may continue to impede rural–urban migration.
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Encouraging agricultural employment might reduce
rural–urban migration and reduce hidden rural unemployment
The increase in agricultural employment in
Central Asia and Trans-Caucasus over the last two decades has had a
detrimental effect on agricultural labor productivity and rural family
incomes. Transition countries in the former USSR cannot, however, encourage
exits from agriculture (as, for instance, in east Germany or the Czech
Republic) due to the risk of mass rural–urban migration, which may
exacerbate growing urban unemployment. With large rural populations, state
budgets would be unable to deal with a new wave of unemployed in urban
areas.
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The institutional structure of pension systems
should follow population developments
For decades, pension systems were based on the
rising revenue generated by an expanding population (the so-called
demographic dividend). As changes in fertility and longevity created new
population structures, however, the dividend disappeared, but pension
systems failed to adapt. They are kept solvent by increasing redistributions
from the shrinking working-age population to retirees. A simple and
transparent structure and individualization of pension system participation
are the key preconditions for an intergenerationally just old-age security
system.
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Families that stay behind when a member migrates
do not clearly benefit
About a billion people worldwide live and work
outside their country of birth or outside their region of birth within their
own country. Labor migration is conventionally viewed as economically
benefiting the family members who are left behind through remittances.
However, splitting up families in this way may also have multiple adverse
effects on education, health, labor supply response, and social status for
family members who do not migrate. Identifying the causal impact of
migration on those who are left behind remains a challenging empirical
question with inconclusive evidence.
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Evidence is mixed on whether quality of life
improves for migrants from post-socialist economies
Most comparative research suggests that
immigrants from post-socialist countries earn less than natives, work in
jobs for which they are overqualified, and may experience unhappiness
compared with natives, other immigrants, and non-migrants. In contrast, one
study presents causal evidence which shows that moving from transition
economies to live in the West increases the incomes, life satisfaction, and
freedom perceptions of those who move. Credibly assessing whether leaving
transition economies improves movers’ quality of life remains a challenging
empirical question.
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Relative costs and family characteristics determine the effectiveness of different forms of childcare
Increasing population age and low fertility rates, which characterize most modern societies, compromise the balance between people who can participate in the labor market and people who need care. This is a demographic and social issue that is likely to grow in importance for future generations. It is therefore crucial to understand what factors can positively influence fertility decisions. Policies related to the availability and costs of different kinds of childcare (e.g. formal care, grandparents, childminders) should be considered after an evaluation of their effects on the probability of women having children.
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Access to education has been hampered by
economic and family shocks in south-east Europe and countries of the former
Soviet Union
Compared to developing economies, European
transition economies had high levels of human capital when their transitions
began, but a lack of resources and policies to protect poor families
hampered children’s access to education, especially for non-compulsory
school grades. Different phenomena associated with transition also
negatively affected children’s education: e.g. parental absence due to
migration, health problems, and alcohol abuse. These findings call for a
greater policy focus on education and for monitoring of the schooling
progress of children in special family circumstances.
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Government policies can stimulate female labor
force participation if coherent and well thought-out
Increasing women's labor force participation is
important to sustainable economic development, especially in economies with
highly educated women and an aging population. Women's participation varies
across transition countries, driven by such economic and social factors as
traditional views of gender roles and limited government support for
caregivers. Still, in all countries there is clear scope for policies aimed
at increasing women's participation. In particular, in countries where
women's educational attainment is already high, policies to support a better
work–life balance and female entrepreneurship look particularly
promising.
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