ABSTRACT
As the one-child policy has been replaced by the new universal two-child policy, the population policy shift has drawn wild concern. The main two questions we want to explore in this chapter are the change trend of human capital and social impact based on demographic change under the two-child policy. We have two parts of forecast work. To forecast the future trend of human capital change, we use the method that follows Arrow et al. (2012), Klenow and Rodriguez-Clare (1997), and Barro and Lee (2010) refer to the Inclusive Wealth Report 2014 (UNU-IHDP and UNEP, 2014). To do the population forecast, we choose the model based on the cohort-component method. By comparing the human capital change with and without the two-child policy, we claim that the two-child policy has a positive effect on human capital, even though it is not very noticeable. The total population of China will keep a steady increase, however, aging speed won’t be slowed down significantly and the imbalance situation of gender structure can only be released slightly. As for other kinds of social impact, the two-child policy plays both negative and positive roles. Our results can provide some new views for policymakers that although the universal two-child policy can improve human capital better than the one-child policy and relieves demographic problems, it is still far to solve current social problems. What we recommend in this chapter is that to encourage birth the government should not only change population policy but also create more social welfare to give couples enough incentives to have more babies, otherwise the fertility rate would not rise obviously.
