Spatial econometric model of China’s regional labor productivity: The role of population aging

The accelerated aging of China's population poses structural challenges to economic growth, compounded by significant regional imbalances in demographic structure and labor productivity dynamics. The aim of the study is to analyze the key drivers and constraints of regional labor productivity with an emphasis on quantifying the impact of population aging, spatial interaction effects, and other factors in the context of interregional differentiation. The novelty of the research lies in the synthesis of the theory of aging and spatial economics, the inclusion of aging as an independent factor in the model with spatial effects. For the analysis, the methods of calculating Moran indices were used to identify spatial clusters and build SAR models with fixed effects. The empirical database includes data from the National Bureau of Statistics of China for 2001–2022 for 31 provinces. The result of the study was a SAR model that confirmed the significant negative impact of the demographic burden coefficient of older people on the economy, in which every 1% increase reduces labor productivity by five points through a reduction in labor resources and “dilution of capital”. The paper reveals a strong positive spatial dependence, regional heterogeneity of effects and the key positive role of capital productivity, which requires the transformation of economic policy towards the creation of innovation corridors and investments in human capital.