Dynamic Impact Mechanism of Birth Rate and GDP in Liaoning Province

This paperʹs objective is to study the issue of impact mechanism of birth rate between Liaoning province and China integrating unit root test, cointegrating test, vector error correction model (VECM), generalized impulse response function and variance decomposition. After selecting the data of birth rate, infant mortality rate and real GDP per capita of Liaoning province and China, we’ve found that: (1) The log series of birth rate, infant mortality and real GDP per capita are integrated of order one; (2) Long-term co-integration relationships exist among these three series, and the impacts of infant mortality rate and GDP per capita on birth rate are more significant in Liaoning province; (3) According to VECM, the adjustment of birth rate in Liaoning province is 0.09067971446 while it is 0.463901315 in China, which means selfregulatory ability of birth rate in Liaoning province is relatively weak; (4) According to generalized impulse response function and variance decomposition in the short-term birth rate fluctuation of Liaoning isn’t affected by infant mortality rate and GDP per capita while in the national level the effect is great. The conclusions and suggestions are: (1) China is in the period of “Demographic window of opportunity” nowadays so high-speed economic growth and low birth rate are both necessary. China should improve professional education and training to build the harmonious society; (2) Remove obstacles of labor migration in order that the most active factor of production – labor force can flow into Liaoning freely, therefore, we can improve the allocative efficiency without a larger population.