IDEAS home Printed from https://ideas.repec.org/a/eee/ecosys/v48y2024i1s0939362523000882.html
   My bibliography  Save this article

Does population aging coexist with income inequality in the long run? Evidence from selected Asia-Pacific countries

Author

Listed:
  • Shaik, Muhammad Raees
  • Goh, Soo Khoon
  • Wong, Koi Nyen
  • Law, Chee Hong

Abstract

Advanced countries have experienced a general rise in income inequality, whereas the outlook for income inequality in developing countries is mixed. As such, reduction in income inequality continues to be an important socio-economic development goal in many countries in the twenty-first century. Furthermore, it remains unclear whether the slow progress in reducing income inequality is a manifestation of the prevailing aging population. Using a sample of countries that are currently considered aging, aged, and super-aged countries in the Asia-Pacific region, the paper empirically examines whether a long-run nexus exists between population aging and income inequality. The methodology adopted includes the augmented autoregressive distributed lag (A-ARDL) bounds test. The key results show that aging and income inequality have a long-run relationship among aged and super-aged countries. In contrast, recently graying countries show no evidence of cointegration due to their relatively early transition to aging. Some other control variables also reveal a significant impact on income inequality. Increases in the real gross domestic product per capita worsen the income distribution, but higher government expenditure can help moderate income inequality. In light of rapid population aging, the findings are useful for policy makers in designing and targeting appropriate socioeconomic policies to help mitigate income inequality in the long run based on the intensity of the share of the elderly population in the countries studied.

Suggested Citation

  • Shaik, Muhammad Raees & Goh, Soo Khoon & Wong, Koi Nyen & Law, Chee Hong, 2024. "Does population aging coexist with income inequality in the long run? Evidence from selected Asia-Pacific countries," Economic Systems, Elsevier, vol. 48(1).
  • Handle: RePEc:eee:ecosys:v:48:y:2024:i:1:s0939362523000882
    DOI: 10.1016/j.ecosys.2023.101149
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0939362523000882
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.ecosys.2023.101149?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. David E. Bloom & David Canning & Günther Fink, 2010. "Implications of population ageing for economic growth," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 26(4), pages 583-612, Winter.
    2. Eirini Andriopoulou & Alexandros Karakitsios & Panos Tsakloglou, 2017. "Inequality and Poverty in Greece:Changes in Times of Crisis," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 116, Hellenic Observatory, LSE.
    3. Paresh Kumar Narayan, 2004. "Fiji's Tourism Demand: The ARDL Approach to Cointegration," Tourism Economics, , vol. 10(2), pages 193-206, June.
    4. Donald R. Davis & David E. Weinstein, 2001. "An Account of Global Factor Trade," American Economic Review, American Economic Association, vol. 91(5), pages 1423-1453, December.
    5. Elinder, Mikael & Erixson, Oscar & Waldenström, Daniel, 2018. "Inheritance and wealth inequality: Evidence from population registers," Journal of Public Economics, Elsevier, vol. 165(C), pages 17-30.
    6. Edward Anderson & Maria Ana Jalles D'Orey & Maren Duvendack & Lucio Esposito, 2017. "Does Government Spending Affect Income Inequality? A Meta-Regression Analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 31(4), pages 961-987, September.
    7. Mathias Dolls & Karina Doorley & Alari Paulus & Hilmar Schneider & Eric Sommer, 2019. "Demographic change and the European income distribution," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(3), pages 337-357, September.
    8. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    9. Robert McNown & Chung Yan Sam & Soo Khoon Goh, 2018. "Bootstrapping the autoregressive distributed lag test for cointegration," Applied Economics, Taylor & Francis Journals, vol. 50(13), pages 1509-1521, March.
    10. Hongyi Li & Heng‐fu Zou, 1998. "Income Inequality is not Harmful for Growth: Theory and Evidence," Review of Development Economics, Wiley Blackwell, vol. 2(3), pages 318-334, October.
    11. Mohsen Bahmani-Oskooee & Scott W. Hegerty & Harvey Wilmeth, 2008. "Short-run and long-run determinants of income inequality: evidence from 16 countries," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 30(3), pages 463-484, April.
    12. Dr. Thomas Drosdowski & Britta Stöver & Dr. Marc Ingo Wolter, 2015. "The impact of ageing on income inequality," GWS Discussion Paper Series 15-16, GWS - Institute of Economic Structures Research.
    13. Hwang, Seokchae & Choe, Chung & Choi, Koangsung, 2021. "Population ageing and income inequality," The Journal of the Economics of Ageing, Elsevier, vol. 20(C).
    14. Deaton, Angus & Paxson, Christina, 1994. "Intertemporal Choice and Inequality," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 437-467, June.
    15. Giuseppina Malerba & Marta Spreafico, 2014. "Structural Determinants Of Income Inequality In The European Union: Evidence From A Panel Analysis," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 124(1), pages 37-84.
    16. Zhong, Hai, 2011. "The impact of population aging on income inequality in developing countries: Evidence from rural China," China Economic Review, Elsevier, vol. 22(1), pages 98-107, March.
    17. Cameron, Lisa A., 2000. "Poverty and inequality in Java: examining the impact of the changing age, educational and industrial structure," Journal of Development Economics, Elsevier, vol. 62(1), pages 149-180, June.
    18. Garry F. Barreti & Tomas F. Crossley & Christopher Worswick, 2000. "Demographic Trends And Consumption Inequality In Australia Between 1975 And 1993," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(4), pages 437-456, December.
    19. Antonelli, Cristiano & Gehringer, Agnieszka, 2017. "Technological change, rent and income inequalities: A Schumpeterian approach," Technological Forecasting and Social Change, Elsevier, vol. 115(C), pages 85-98.
    20. Sam, Chung Yan & McNown, Robert & Goh, Soo Khoon, 2019. "An augmented autoregressive distributed lag bounds test for cointegration," Economic Modelling, Elsevier, vol. 80(C), pages 130-141.
    21. Era Dabla-Norris & Kalpana Kochhar & Nujin Suphaphiphat & Franto Ricka & Evridiki Tsounta, 2015. "Causes and Consequences of Income Inequality; A Global Perspective," IMF Staff Discussion Notes 15/13, International Monetary Fund.
    22. Sonali Jain-Chandra & Tidiane Kinda & Kalpana Kochhar & Shi Piao & Johanna Schauer, 2019. "Sharing the Growth Dividend: Analysis of Inequality in Asia," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 2(12), pages 5-28, September.
    23. Jürgen Faik, 2012. "Impacts of an Ageing Society on Macroeconomics and Income Inequality: The Case of Germany since the 1980s," SOEPpapers on Multidisciplinary Panel Data Research 518, DIW Berlin, The German Socio-Economic Panel (SOEP).
    24. Haixin Zhang & Lili Ke & Donghong Ding, 2021. "The Effect of Chinese Population Aging on Income Inequality: Based on a Micro-Macro Multiregional Dynamic CGE Modelling Analysis," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 57(5), pages 1399-1419, April.
    25. Guillaume Vandenbroucke & Heting Zhu, 2017. "Aging and Wealth Inequality," Economic Synopses, Federal Reserve Bank of St. Louis, issue 2, pages 1-2.
    26. Naoto Yamauchi, 1996. "The Effects of Aging on National Saving and Asset Accumulation in Japan," NBER Chapters, in: The Economic Effects of Aging in the United States and Japan, pages 131-151, National Bureau of Economic Research, Inc.
    27. Joshua R. Goldstein & Ronald D. Lee, 2014. "How large are the effects of population aging on economic inequality?," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 12(1), pages 193-209.
    28. Sung-Jin Kang & Robert Rudolf, 2016. "Rising Or Falling Inequality In Korea? Population Aging And Generational Trends," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 61(05), pages 1-26, December.
    29. Bourguignon, Francois, 1981. "Pareto Superiority of Unegalitarian Equilibria in Stiglitz' Model of Wealth Distribution with Convex Saving Function," Econometrica, Econometric Society, vol. 49(6), pages 1469-1475, November.
    30. Zhi Luo & Guanghua Wan & Chen Wang & Xun Zhang, 2018. "Aging and inequality: The link and transmission mechanisms," Review of Development Economics, Wiley Blackwell, vol. 22(3), pages 885-903, August.
    31. Giuseppina Malerba & Marta Spreafico, 2014. "Structural Determinants Of Income Inequality In The European Union: Evidence From A Panel Analysis," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 122(1), pages 37-84.
    32. Ms. Era Dabla-Norris & Ms. Kalpana Kochhar & Mrs. Nujin Suphaphiphat & Mr. Franto Ricka & Ms. Evridiki Tsounta, 2015. "Causes and Consequences of Income Inequality: A Global Perspective," IMF Staff Discussion Notes 2015/013, International Monetary Fund.
    33. repec:bla:revinw:v:44:y:1998:i:3:p:361-81 is not listed on IDEAS
    34. Goh, Soo Khoon & McNown, Robert & Wong, Koi Nyen, 2020. "Macroeconomic implications of population aging: Evidence from Japan," Journal of Asian Economics, Elsevier, vol. 68(C).
    35. Fumio Ohtake & Makoto Saito, 1998. "Population Aging And Consumption Inequality In Japan," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 44(3), pages 361-381, September.
    36. Qian Hu & Xiaoyan Lei & Bo Zhao, 2021. "Demographic changes and economic growth: impact and mechanisms," China Economic Journal, Taylor & Francis Journals, vol. 14(3), pages 223-242, September.
    37. Chong, Terence Tai Leung & Ka, Yiu Tung, 2019. "Forecasting Income Inequality with Demographic Projections," MPRA Paper 99160, University Library of Munich, Germany.
    38. Zhiqiang Dong & Canqing Tang & Xiahai Wei, 2018. "Does population aging intensify income inequality? Evidence from China," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 23(1), pages 66-77, January.
    39. repec:bla:rdevec:v:2:y:1998:i:3:p:318-34 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ming Gao & Fan Jiang & Jiwen Wang & Bi Wu, 2024. "Population ageing and income inequality in rural China: an 18-year analysis," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-13, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Joyce Hsieh, 2023. "Population aging and wealth inequality," Economic Change and Restructuring, Springer, vol. 56(6), pages 4223-4252, December.
    2. Chu, Yihe & Li, Yujia & Che, Ming, 2024. "Population aging and the dynamics of the skill income gap: An analysis of a multiple mediation effect," Finance Research Letters, Elsevier, vol. 62(PB).
    3. Soo Khoon Goh & Koi Nyen Wong & Robert McNown, 2024. "Macroeconomic effects of demographic change: From the perspective of China's urbanisation," The World Economy, Wiley Blackwell, vol. 47(2), pages 440-461, February.
    4. Ming Gao & Fan Jiang & Jiwen Wang & Bi Wu, 2024. "Population ageing and income inequality in rural China: an 18-year analysis," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-13, December.
    5. Md. Monirul Islam & Mohammad Tareque & Abu N. M. Wahid & Md. Mahmudul Alam & Kazi Sohag, 2022. "Do the Inward and Outward Foreign Direct Investments Spur Domestic Investment in Bangladesh? A Counterfactual Analysis," JRFM, MDPI, vol. 15(12), pages 1-22, December.
    6. Nolan, Brian & Richiardi, Matteo & Valenzuela, Luis, 2018. "The Drivers of Inequality in Rich Countries," INET Oxford Working Papers 2018-15, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    7. Prashant Kumar Choudhary & Priyanka Saharia, 2023. "Global income inequality and measuring values with the world values survey," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 25(1), pages 103-122, June.
    8. Blotevogel, Robert & Imamoglu, Eslem & Moriyama, Kenji & Sarr, Babacar, 2022. "Income inequality measures and economic growth channels," Journal of Macroeconomics, Elsevier, vol. 72(C).
    9. Md Jamil, Abd Rahim & Law, Siong Hook & Khair-Afham, M.S. & Trinugroho, Irwan, 2024. "Financial inclusion and income inequality in developing countries: The role of aging populations," Research in International Business and Finance, Elsevier, vol. 67(PA).
    10. Karasoy, Alper, 2022. "Is innovative technology a solution to Japan's long-run energy insecurity? Dynamic evidence from the linear and nonlinear methods," Technology in Society, Elsevier, vol. 70(C).
    11. Ersin Yavuz & Emre Kilic & Abdullah Emre Caglar, 2024. "A new hypothesis for the unemployment-environment dilemma: is the environmental Phillips curve valid in the framework of load capacity factor in Turkiye?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(11), pages 29475-29492, November.
    12. Narasingha Das & Partha Gangopadhyay, 2023. "Did weekly economic index and volatility index impact US food sales during the first year of the pandemic?," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-23, December.
    13. Cesaroni, T. & D'Elia, E. & De Santis, R., 2019. "Inequality in EMU: is there a core periphery dualism?," The Journal of Economic Asymmetries, Elsevier, vol. 20(C).
    14. Xinxin Wang & Jingjing Hong & Pengpeng Fan & Shidan Xu & Zhixian Chai & Yubo Zhuo, 2021. "Is China’s urban–rural difference in population aging rational? An international comparison with key indicators," Growth and Change, Wiley Blackwell, vol. 52(3), pages 1866-1891, September.
    15. Syed, Qasim Raza & Durani, Farah & Kisswani, Khalid M. & Alola, Andrew Adewale & Siddiqui, Aaliyah & Anwar, Ahsan, 2024. "Testing natural resource curse hypothesis amidst geopolitical risk: Global evidence using novel Fourier augmented ARDL approach," Resources Policy, Elsevier, vol. 88(C).
    16. Pata, Ugur Korkut & Ertugrul, Hasan Murat, 2023. "Do the Kyoto Protocol, geopolitical risks, human capital and natural resources affect the sustainability limit? A new environmental approach based on the LCC hypothesis," Resources Policy, Elsevier, vol. 81(C).
    17. Goh, Soo Khoon & McNown, Robert & Wong, Koi Nyen, 2020. "Macroeconomic implications of population aging: Evidence from Japan," Journal of Asian Economics, Elsevier, vol. 68(C).
    18. Chen, Jiamin & Chen, Yuwei, 2024. "Does natural resources rent promote carbon neutrality: The role of digital finance," Resources Policy, Elsevier, vol. 92(C).
    19. Ibrar Hussain & Umar Hayat & Md Shabbir Alam & Uzma Khan, 2024. "A Dynamic Analysis of the Twin-Deficit Hypothesis: the Case of a Developing Country," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 31(1), pages 25-52, March.
    20. Hanewald, Katja & Jia, Ruo & Liu, Zining, 2021. "Why is inequality higher among the old? Evidence from China," China Economic Review, Elsevier, vol. 66(C).

    More about this item

    Keywords

    Income inequality; Population aging; Long-run relationship; Aging; Aged; Super-aged;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecosys:v:48:y:2024:i:1:s0939362523000882. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://edirc.repec.org/data/osteide.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.