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Effects of Demographic Change on Economic Growth: A Panel ARDL Approach for Selected OECD Countries

Author

Listed:
  • Hakki Çiftçi
  • Cevat Bilgin
  • Handan Kaynar Bilgin

Abstract

The changing population dynamics have substantial impact on economy. This paper investigates the effects of demographic change on economic growth. The share of working age population, child dependency ratio, old-age dependency ratio and age dependency ratio are used as demographic variables. The effects of these variables on the gross domestic product per capita growth rate are examined for the OECD countries covering the period 1970-2021. Four different models are estimated by using panel ARDL estimation method. The findings derived from the estimated models point out that the old-age dependency ratio and age dependency ratio have negative effects on economic growth. On the other hand, the share of working age population has a positive effect on economic growth. These results suggest that demographic change causing an increase in the dependency ratio and a decrease in the share of working age population will have adverse impacts on economic performance in the long run.

Suggested Citation

  • Hakki Çiftçi & Cevat Bilgin & Handan Kaynar Bilgin, 2023. "Effects of Demographic Change on Economic Growth: A Panel ARDL Approach for Selected OECD Countries," Prague Economic Papers, Prague University of Economics and Business, vol. 2023(6), pages 589-607.
    • Handle: RePEc:prg:jnlpep:v:2023:y:2023:i:6:id:846:p:589-607
    DOI: 10.18267/j.pep.846
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    More about this item

    Keywords

    demographic change; economic growth; panel ARDL;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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