The Contributions of Demographic Factors to Economic Growth
Mykola Pasichnyi
Faculty of Finance and Accounting, Department of Finance, Kyiv National University of Trade and Economics (Ukraine)
https://orcid.org/0000-0001-7663-776X
Anton Nepytaliuk
Faculty of Economics, Department of Management and Behavioral Economics, Vasyl’ Stus Donetsk National University (Ukraine)
https://orcid.org/0000-0002-7890-3889
Abstract
In this paper, an updated approach to evaluate the contribution of demographic factors to economic development is proposed. The forecasted shifts in public production were considered with respect to the institutional framework. The relationship between the main demographic variables and the economic growth for the sample of 45 advanced and emerging market economies from 1990 to 2017 was examined, applying the unbalanced panel data method. Over the period, in the sample, an essential increase in life expectancy adversely affected the real GDP per capita growth rate. The empirical investigation pointed out that the above demographic variable was strongly linked to nominal GDP per capita. In advanced economies, the examined demographic indicator was considerably higher than in emerging ones. We found out that an increase in the working-aged stratum substantially reduced the real GDP dynamics, but that interconnection was not robust. In the long-run, the institutional framework should be taken into account to achieve favorable public performance. Demographic variables should be forecasted and calibrated, regarding the endogenous economic triggers. Both public and private investments matter.
Keywords:
population, human capital, demographic sustainability, economic growthReferences
ACEMOGLU D., JOHNSON S., 2007, Disease and development: the effect of life expectancy on economic growth, in: Journal of political Economy, 115(6), p. 925-985, https://doi.org/10.1086/529000.
DOI: https://doi.org/10.1086/529000
Google Scholar
ACEMOGLU D., RESTREPO P., 2017, Secular stagnation? The effect of aging on economic growth in the age of automation, in: American Economic Review, 107(5), p. 174-179, https://doi.org/10.1257/aer.p20171101.
DOI: https://doi.org/10.1257/aer.p20171101
Google Scholar
AHMAD M., KHAN R. E. A., 2019, Does demographic transition with human capital dynamics matter for economic growth?, A dynamic panel data approach to GMM, in: Social Indicators Research, 142(2), p. 753-772, https://doi.org/10.1007/s11205-018-1928-x.
DOI: https://doi.org/10.1007/s11205-018-1928-x
Google Scholar
AHSAN H., HAQUE M. E., 2017, Threshold effects of human capital: Schooling and economic growth, in: Economics Letters, 156, p. 48-52, https://doi.org/10.1016/j.econlet.2017.04.014.
DOI: https://doi.org/10.1016/j.econlet.2017.04.014
Google Scholar
BARRO R. J., LEE J. W., 2013, A new data set of educational attainment in the world, 1950-2010, in: Journal of development economics, 104, p. 184-198, https://doi.org/10.1016/j.jdeveco.2012.10.001.
DOI: https://doi.org/10.1016/j.jdeveco.2012.10.001
Google Scholar
BARRO R. J., SALA-I-MATIN X., 2003, Economic growth (2nd ed.), MIT Press, Massachusetts.
Google Scholar
BLOOM D. E., CANNING D., SEVILLA J., 2001, Economic growth and the demographic transition, (No. w8685), National Bureau of Economic Research, https://doi.org/10.3386/w8685.
DOI: https://doi.org/10.3386/w8685
Google Scholar
BLOOM D. E., CANNING D., SEVILLA J., 2003, The demographic dividend: A new perspective on the economic consequences of population change, Rand Corporation.
DOI: https://doi.org/10.7249/MR1274
Google Scholar
BLOOM D. E., CANNING D., FINK G., FINLAY J. E., 2007, Does age structure forecast economic growth?, in: International Journal of Forecasting, 23(4), p. 569-585, https://doi.org/10.1016/j.ijforecast.2007.07.001.
DOI: https://doi.org/10.1016/j.ijforecast.2007.07.001
Google Scholar
BLOOM D. E., CANNING D., FINK G., FINLAY J. E., 2009, Fertility, female labor force participation, and the demographic dividend, in: Journal of Economic growth, 14(2), p. 79-101, https://doi.org/10.1007/s10887-009-9039-9.
DOI: https://doi.org/10.1007/s10887-009-9039-9
Google Scholar
BOUCEKKINE R., DE LA CROIX D., LICANDRO O., 2002, Vintage human capital, demographic trends, and endogenous growth, in: Journal of Economic Theory, 104(2), p. 340-375, https://doi.org/10.1006/jeth.2001.2854.
DOI: https://doi.org/10.1006/jeth.2001.2854
Google Scholar
CERVELLATI M., SUNDE U., 2015, The economic and demographic transition, mortality, and comparative development, in: American Economic Journal: Macroeconomics, 7(3), p. 189-225, https://doi.org/10.1257/mac.20130170.
DOI: https://doi.org/10.1257/mac.20130170
Google Scholar
COOLEY T. F., HENRIKSEN E., NUSBAUM C., 2019, The Growth-Cost of Demographic Change in Europe, preliminary publication in: Review of Economic Dynamics, 352, p. 1-30, https://economicdynamics.org/meetpapers/2019/paper_1352.pdf.
Google Scholar
CUARESMA J. C., DOPPLELHOFER G., HUBER F., PIRIBAUER P., 2018, Human capital accumulation and long-term income growth projections for European regions, in: Journal of Regional Science, 58(1), p. 81-99, https://doi.org/10.1111/jors.12339.
DOI: https://doi.org/10.1111/jors.12339
Google Scholar
FAGGIAN A., PARTRIDGE M., MALECKI E. J., 2017, Creating an environment for economic growth: creativity, entrepreneurship or human capital?, in: International Journal of Urban and Regional Research, 41(6), p. 997-1009, https://doi.org/10.1111/1468-2427.12555.
DOI: https://doi.org/10.1111/1468-2427.12555
Google Scholar
FERNIHOUGH A., 2017, Human capital and the quantity–quality trade-off during the demographic transition, Journal of Economic Growth, 22(1), p. 35-65, https://doi.org/10.1007/s10887-016-9138-3.
DOI: https://doi.org/10.1007/s10887-016-9138-3
Google Scholar
GALOR O., 2012, The demographic transition: causes and consequences, in: Cliometrica, 6(1), p. 1-28, https://doi.org/10.1007/s11698-011-0062-7.
DOI: https://doi.org/10.1007/s11698-011-0062-7
Google Scholar
HANSEN C. W., LONSTRUP L., 2015, The rise in life expectancy and economic growth in the 20th century, in: The Economic Journal, 125(584), p. 838-852, https://doi.org/doi.org/10.1111/ecoj.12261/
DOI: https://doi.org/10.1111/ecoj.12261
Google Scholar
HANUSHEK E. A., 2016, Will more higher education improve economic growth?, Oxford Review of Economic Policy, 32(4), p. 538-552, https://doi.org/10.1093/oxrep/grw025.
DOI: https://doi.org/10.1093/oxrep/grw025
Google Scholar
LEE R. D., 2001, Demographic change and fiscal policy, Cambridge University Press.
Google Scholar
LEE R. D., 2003, The demographic transition: three centuries of fundamental change, in: Journal of economic perspectives, 17(4), p. 167-190, https://doi.org/10.1257/089533003772034943.
DOI: https://doi.org/10.1257/089533003772034943
Google Scholar
LOCAS JR. R. E., 2015, Human capital and growth, in: American Economic Review, 105(5), p. 85-88, https://doi.org/10.1257/aer.p20151065.
DOI: https://doi.org/10.1257/aer.p20151065
Google Scholar
MALMBERG B., 1994, Age structure effects on economic growth – Swedish evidence, in: Scandinavian Economic History Review, 42(3), p. 279-295, https://doi.org/10.1080/03585522.1994.10415889.
DOI: https://doi.org/10.1080/03585522.1994.10415889
Google Scholar
MCGRATH P., 2016, The Relationship between Human Capital and Economic Growth in Ireland, SSRN 2872739, https://doi.org/10.2139/ssrn.2872739.
DOI: https://doi.org/10.2139/ssrn.2872739
Google Scholar
NAGARAJAN N. R., TEIXEIRA A. A., SILVA S.T., 2016, The impact of an ageing population on economic growth: an exploratory review of the main mechanisms, in: Análise Social, 218, p. 4-35, https://www.jstor.org/stable/43755167 (1.10.2019).
Google Scholar
PASICHNYI M., KANEVA T., RUBAN M., NEPYTALIUK A., 2019, The impact of fiscal decentralization on economic development, in: Investment Management and Financial Innovations, 16(3), p. 29-39. https://doi.org/10.21511/imfi.16(3).2019.04.
DOI: https://doi.org/10.21511/imfi.16(3).2019.04
Google Scholar
PELINESCU E., 2015, The impact of human capital on economic growth, in: Procedia Economics and Finance, 22, p. 184-190. https://doi.org/10.1016/S2212-5671(15)00258-0.
DOI: https://doi.org/10.1016/S2212-5671(15)00258-0
Google Scholar
ROMER P. M., 1990, Endogenous technological change, in: Journal of political Economy, 98 (5, Part 2), p. S71-S102, https://doi.org/10.1086/261725.
DOI: https://doi.org/10.1086/261725
Google Scholar
SANCHEZ-ROMERO M., LEE R. D., PRSKAWETZ A., 2018, Redistributive effects of different pension structures when longevity varies by socioeconomic status in a general equilibrium setting, Population Association of America, p. 1-56, https://www.econstor.eu/handle/10419/203628 (1.10.2019).
Google Scholar
TEIXERA A. A., QUEIROS A. S., 2016, Economic growth, human capital and structural change: A dynamic panel data analysis, in: Research policy, 45(8), p. 1636-1648, https://doi.org/10.1016/j.respol.2016.04.006.
DOI: https://doi.org/10.1016/j.respol.2016.04.006
Google Scholar
The European Commission Database, 2019, https://ec.europa.eu/eurostat/data/database (21.11.2019).
Google Scholar
The International Monetary Fund Database, 2019, https://www.imf.org/en/Data (21.11.2019).
Google Scholar
The OECD Data, 2019, https://stats.oecd.org/ (21.11.2019).
Google Scholar
The World Bank Open Data, 2019, https://data.worldbank.org/ (21.11.2019).
Google Scholar
UDDIN G. A., ALAM K., GOW J., 2016, Population age structure and savings rate impacts on economic growth: Evidence from Australia, in: Economic Analysis and Policy, 52, p. 23-33, https://doi.org/10.1016/j.eap.2016.08.002.
DOI: https://doi.org/10.1016/j.eap.2016.08.002
Google Scholar
Authors
Mykola PasichnyiFaculty of Finance and Accounting, Department of Finance, Kyiv National University of Trade and Economics Ukraine
https://orcid.org/0000-0001-7663-776X
Authors
Anton NepytaliukFaculty of Economics, Department of Management and Behavioral Economics, Vasyl’ Stus Donetsk National University Ukraine
https://orcid.org/0000-0002-7890-3889
Statistics
Abstract views: 71PDF downloads: 35
License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.