Quality of education, ageing and labor productivity

by Fange Meng, Xin Wen

With the decrease in fertility rate and the extension of life expectancy, China’s ageing degree is deepening, and there is a decrease in the number of labor force individuals, leading to an increase in the burden of old-age care and constraining economic growth. The improvement of human capital can promote economic growth. Research is rquired to determine whether factors such as the teacher-student ratio (quality of education) and the average number of years of schooling (quantity of education) can help alleviate the negative impacts of ageing. The findings demonstrate that education, both in terms of quantity and quality, can successfully reduce the detrimental consequences of ageing. The threshold effect model’s findings indicate that both the amount and quality of education can be more effective in reducing the negative impacts of ageing when average years of education surpass 10.87 years and the teacher-student ratio hits 7.80 (780 instructors per 1000 pupils). The results of heterogeneity analysis reveal that both the quantity and quality of education could potentially mitigate the negative effects of ageing in the eastern and western regions, although these factors do not seem to have the same effect in the central region. In the northern and southern regions, it is found that while the quantity of education can help alleviate the negative effects of ageing, the quality of education is effective only in the southern region and not in the northern region. Therefore, one potential strategy to counteract the adverse effects of ageing with a declining number of children is to increase the teacher-student ratio and extend the duration of free education.