IDEAS home Printed from https://ideas.repec.org/a/tei/journl/v12y2019i3p43-50.html
   My bibliography  Save this article

The Nexus Between Population and Economic Growth In Ethiopia: An Empirical Inquiry

Author

Listed:
  • Adisu Abebaw Degu

    (Department of Economics, Salale University, Fiche, Oromia Regional State of Ethiopia)

Abstract

Purpose: The link between population growth and economic growth has been becoming of most significant interest for researchers. However, there is no consensus among economists and researchers about the interaction between population and economic growth. Using time-series data spanning from the period 1981 to 2018, this study examined the population-economic growth nexus in the second most populous African nation-Ethiopia. Design/methodology/approach: The study used yearly time series data spanning from 1981 to 2018, Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) unit root tests, Autoregressive Distributed Lag (ARDL) co-integration approach and Toda-Yamamoto Causality tests. Finding: Population and economic growth (Proxied by GDP) have a long-run association, as confirmed by the bound test co-integration approach. From ARDL model estimates, population growth is found to have a negative and significant effect on economic growth, both in the short-run and in the long-run. Likewise, growth in GDP affects population growth positively and significantly—both in the short-run and long-run. The Toda-Yamamoto Granger-Causality test revealed that, there is a unidirectional causality running from population to economic growth. Research implications: The current (as of 2019) number of the total population of Ethiopia exceeds 110 million—making the country the second-most populous nation in Africa. With the prevalence of high fertility rate and mortality rate, unemployment, and poverty, the population is not expected to bring economic development in general and economic growth in particular. Hence, it is advised to the concerned body that anti-natal policies that discourage the fertility rate, need to be re-considered to supplement with economic growth policies. Originality/value: This paper provides an empirical study of population-economic growth nexus in Ethiopia—a low-income country with a rapidly growing economy but also a rapidly increasing population and labor force. An understanding of such an issue would provide a reliable input for formulating development policies. However, up to the best of my knowledge, there is limited empirical research about population-growth nexus growth for the case of Ethiopia.

Suggested Citation

  • Adisu Abebaw Degu, 2019. "The Nexus Between Population and Economic Growth In Ethiopia: An Empirical Inquiry," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 12(3), pages 43-50, December.
    • Handle: RePEc:tei:journl:v:12:y:2019:i:3:p:43-50
    as

    Download full text from publisher

    File URL: https://ijbesar.af.duth.gr/docs/volume12_issue3/12_03_05.pdf
    Download Restriction: no
    File URL: https://ijbesar.af.duth.gr/volume12_issue3.php
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    2. Toda, Hiro Y. & Yamamoto, Taku, 1995. "Statistical inference in vector autoregressions with possibly integrated processes," Journal of Econometrics, Elsevier, vol. 66(1-2), pages 225-250.
    3. Zapata, Hector O & Rambaldi, Alicia N, 1997. "Monte Carlo Evidence on Cointegration and Causation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 59(2), pages 285-298, May.
    4. Jorge Garza-Rodriguez & Cecilia I. Andrade-Velasco & Karen D. Martinez-Silva & Francisco D. Renteria-Rodriguez & Pedro A. Vallejo-Castillo, 2016. "The relationship between population growth and economic growth in Mexico," Economics Bulletin, AccessEcon, vol. 36(1), pages 97-107.
    5. R.S. Dauda & J.M. Aziakpono, 2015. "Population Dynamics and Economic Outcomes in West Africa," Studies in Economics and Econometrics, Taylor & Francis Journals, vol. 39(3), pages 117-145, December.
    6. Fumitaka Furuoka, 2018. "Is population beneficial to economic growth? An empirical study of China," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(1), pages 209-225, January.
    7. Shuffield Seyram Asafo, 2018. "The Macro-economy and Non-Performing Loans in Ghana: A BVAR approach," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 11(3), pages 65-72, December.
    8. A. Oznur Umit & H. Isil Alkan, 2016. "The Effects of Foreign Direct Investments and Economic Growth on Employment and Female Employment: A Time Series Analysis With Structural Breaks For Turkey," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 9(3), pages 43-49, December.
    9. Greenwell Collins Matchaya & Pius Chilonda & Sibusiso Nhelengethwa, 2013. "International Trade and Income in Malawi: A Co-integration and Causality Approach," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 6(2), pages 125-147, September.
    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. Oyedepo, Elizabeth Omolola & Obayelu, Abiodun Elijah & Owuru, Joel Ede, 2023. "Effects of Population Dynamics on Economic Growth Among the World Most Populous Countries," African Journal of Economic Review, African Journal of Economic Review, vol. 11(3), June.
    2. Bopaki Phogole & Kowiyou Yessoufou, 2022. "Biodiversity and Economy but Not Social Factors Predict Human Population Dynamics in South Africa," Sustainability, MDPI, vol. 14(14), pages 1-13, July.

    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. Chor Foon Tang, 2015. "How Stable is the Savings-led Growth Hypothesis in Malaysia? The Bootstrap Simulation and Recursive Causality Tests," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 9(1), pages 1-17, February.
    2. Nepal, Rabindra & Paija, Nirash, 2019. "A multivariate time series analysis of energy consumption, real output and pollutant emissions in a developing economy: New evidence from Nepal," Economic Modelling, Elsevier, vol. 77(C), pages 164-173.
    3. Sami Saafi & Meriem Bel Haj Mohamed & Abdeljelil Farhat, 2017. "Untangling the causal relationship between tax burden distribution and economic growth in 23 OECD countries: Fresh evidence from linear and non-linear Granger causality," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 14(2), pages 265-301, December.
    4. Maite Alguacil & Ana Cuadros & Vicente Orts, 2004. "Does saving really matter for growth? Mexico (1970-2000)," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(2), pages 281-290.
    5. Hummera Saleem & Malik Shahzad & Muhammad Bilal Khan & Bashir Ahmad Khilji, 2019. "Innovation, total factor productivity and economic growth in Pakistan: a policy perspective," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 8(1), pages 1-18, December.
    6. Tang, Chor Foon, 2010. "Savings-led growth theories: A time series analysis for Malaysia using the bootstrapping and time-varying causality techniques," MPRA Paper 27299, University Library of Munich, Germany.
    7. Justin Doran, 2012. "An analysis of the interdependence of demographic factors, labour effort and economic growth in Ireland," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 39(3), pages 221-237, February.
    8. Yadawananda Neog, 2019. "Does Fiscal Spending Promote Economic Growth in India? An Application of Toda-Yamamoto Causal Approach," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 23-40.
    9. Shahiduzzaman, Md & Alam, Khorshed, 2012. "Cointegration and causal relationships between energy consumption and output: Assessing the evidence from Australia," Energy Economics, Elsevier, vol. 34(6), pages 2182-2188.
    10. Segun Thompson Bolarinwa & Olufemi B. Obembe, 2017. "Empirical Analysis of the Nexus between Saving and Economic Growth in Selected African Countries (1981–2014)," Journal of Development Policy and Practice, , vol. 2(1), pages 110-129, January.
    11. Zeynel Abidin Ozdemir, 2010. "Dynamics Of Inflation, Output Growth And Their Uncertainty In The Uk: An Empirical Analysis," Manchester School, University of Manchester, vol. 78(6), pages 511-537, December.
    12. Kumar, Nikeel Nishkar & Patel, Arvind, 2023. "Nonlinear effect of air travel tourism demand on economic growth in Fiji," Journal of Air Transport Management, Elsevier, vol. 109(C).
    13. İbrahim Özmen & Mihai Mutascu, 2024. "Public Debt and Growth: New Insights," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 8706-8736, June.
    14. Ilham Haouas & Naceur Kheraief & Arusha Cooray & Syed Jawad Hussain Shahzad, 2019. "Time-Varying Casual Nexuses Between Remittances and Financial Development in Some MENA Countries," Working Papers 1294, Economic Research Forum, revised 2019.
    15. Banu Demirhan, 2016. "Financial Development and Investment Amount Nexus: A Case Study of Turkey," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 6(3), pages 127-134, March.
    16. Lau, Evan & Lee, Koon Po, 2007. "Interdependence of Income between China and ASEAN-5 Countries," MPRA Paper 2231, University Library of Munich, Germany.
    17. Bashiri Behmiri, Niaz & Pires Manso, José R., 2012. "Does Portuguese economy support crude oil conservation hypothesis?," Energy Policy, Elsevier, vol. 45(C), pages 628-634.
    18. Emre Aksoy, 2013. "Relationships between Employment and Growth from Industrial Perspective by Considering Employment Incentives: The Case of Turkey," International Journal of Economics and Financial Issues, Econjournals, vol. 3(1), pages 74-86.
    19. Zapata, Hector O. & Gil, Jose M., 1999. "Cointegration and causality in international agricultural economics research," Agricultural Economics, Blackwell, vol. 20(1), pages 1-9, January.
    20. Andersson, Björn, 1999. "On the Causality Between Saving and Growth: Long- and Short-Run Dynamics and Country Heterogeneity," Working Paper Series 1999:18, Uppsala University, Department of Economics.

    More about this item

    Keywords

    Growth Population ARDL; Toda-Yamamoto Causality; Ethiopia;
    All these keywords.

    JEL classification:

    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • J1 - Labor and Demographic Economics - - Demographic Economics

    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:tei:journl:v:12:y:2019:i:3:p:43-50. 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: Kostas Stergidis (email available below). General contact details of provider: https://edirc.repec.org/data/dbikagr.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.