This paper focuses on two major elements of China’s population dynamics – the
rising proportion of workers in the population and the shift of rural workers from
agriculture to industry and services – in a provincial-level analysis of per capita
income and productivity growth during the last three decades. We measure the
‘mechanical’ contributions of these dynamics to per capita income as revealed by
growth decompositions, before assessing the deeper population determinants of per
capita income and productivity in a series of growth regressions. Our results indicate
that lower levels of rural dependency and the sectoral shift in employment have both
made significant positive contributions to per capita income and aggregate
productivity growth. However, the negligible impact of China’s changing age
structure combined with the negative impact of changing sectoral employment on
industrial productivity growth suggest that the benefits of these population dynamics
to China’s economic performance may have been overstated in the past.