What is it about?

China’s past economic growth was strongly supported by a large working-age population. As the population ages, this age-based advantage is becoming weaker. This study examines whether better workforce skills can help replace the declining demographic dividend. Using data from 336 Chinese cities between 2000 and 2020, we measure both the age structure of local populations and the skill structure of local labor markets. We find that China’s age-based advantage peaked around 2010 and has since declined, while the skill level of the workforce has continued to rise. The results show that skills now play a stronger role than age structure in supporting economic growth.

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Why is it important?

Many countries are facing population aging and a shrinking share of working-age people. This study shows that economic growth does not depend only on having more workers, but increasingly depends on what workers can do. Delaying retirement can help reduce pressure from aging, but it cannot fully solve the long-term challenge. A more sustainable response is to improve workforce skills, create more high-skill jobs, and better match education and training with real labor market needs. These findings are important for China and for other countries seeking to maintain prosperity in an aging society.

Perspectives

As a researcher working on population and economic geography, I wrote this article to respond to a question that is important not only for China, but also for many aging societies: how can economic growth continue when the traditional demographic dividend is fading? I hope this study helps readers move beyond a simple concern with population size and pay more attention to the quality, structure, and spatial allocation of skills. For me, the most important message is that aging does not necessarily mean economic decline, but it requires a different development strategy centered on skill upgrading and better use of human capital. This is why I believe the article is relevant for researchers, policymakers, and anyone interested in the future of work and prosperity.

Hengyu Gu
Nanjing University

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This page is a summary of: China’s demographic dividend has moved from age-based labor supply to skill-based productivity, Proceedings of the National Academy of Sciences, April 2026, Proceedings of the National Academy of Sciences,
DOI: 10.1073/pnas.2532906123.
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