Impact of Demographic Variables on Economic Growth in South Asian Countries: A Panel Data Analysis
Abstract
This study find the impact of demographic variables on economic growth in selected South Asian countries; Pakistan, India, Bangladesh and Sri-Lanka using panel data from 1976 to 2017. Fertility rate and life expectancy are used as demographic variables and GDP is used to indicate the economic growth. Panel unit root tests including Levin-Lin & Chu, Im-Pesaran & Shin, ADF-Fisher χ2, PP-Fisher χ2 are applied to check the stationary of variables. Pedroni and Kao Panel Co-integration are employed to test the co-integration among variables. Fully Modified Ordinary Least Squares (FMOLS) estimators are obtained for long run relationship. Results show that total fertility rate and life expectancy have significant impact on economic growth in these four South Asian countries. For example, one unit increase in total fertility rate depresses the economic growth by 0.106 units. However, economic growth is accelerated by 0.196 units due to one year increase in life expectancy.
Downloads
Metrics
References
References
Abdullah, T. S. (2015). The effect of increase in population on economic growth of Bangladesh. Developing Countries Studies. 5(17) 87-94.
Breitung, J. (2000). The Local Power of Some Unit Root Tests for Panel Data. in B. Baltagi (ed.), Nonstationary Panels, Panel Cointegration, and Dynamic Panels, Advances in Econometrics, 15, 161-178, Elsevier Science. DOI: https://doi.org/10.1016/S0731-9053(00)15006-6
Choi, I. (2001). Unit Root Tests for Panel Data. Journal of International Money and Finance. 20, 249–272. DOI: https://doi.org/10.1016/S0261-5606(00)00048-6
Choudhry, M. T. and Elhorst, J. P. (2010). Demographic Tansition and Economic Growth in China, India and Pakistan. Economic Systems, 34 (2), 218-236. DOI: https://doi.org/10.1016/j.ecosys.2010.02.001
Ecevit, E. (2013). The impact of life expectancy on economic growth: panel co-integration and causality analysis for OECD countries. The International Journal Of Social Sciences. 16(1) 1-14.
Eggleston, K. N. and Fuchs, V. R. (2012). The New Demogrpahic Transition: Most Gains in Life Expectancy now Realized Late in Life. Journey of Economic Perspectives, 26 (3), 137-156. DOI: https://doi.org/10.1257/jep.26.3.137
Gideon K. T., Gachanja, P., and Obere, A. (2013) The impact of population change on economic growth in Kenya. International Journal of Economics and Management Sciences. 2 (6), 43-60
Hadri, K. (2000). Testing for Unit Roots in Heterogeneous Panel Data. Econometrics Journal. 3, 148-161. DOI: https://doi.org/10.1111/1368-423X.00043
Hamza, L. (2015). Panel data analysis of population growth and it implication on economic growth of developing countries. Proceedings Of The International Symposium On Emergins Trends. 3(5) 1-14.
Im K.S., M.H. Pesaran (2003). On the Panel Unit Roots Testing Using Nonlinear Instrumental Variables. working paper. http://www.econ.cam.ac.uk/faculty/pesaran/. DOI: https://doi.org/10.2139/ssrn.482463
Jacob Pegou Sibe, Cesaire Chiatchoua and Marie Noel Megne (2016) The Long Run Relationship between Population Growth and Economic Growth: a Panel Data Analysis of 30 of the most Populated Countries of the World. Análisis Económico Núm. 77, vol. XXXI
Khalid Iqbal, N. Y. (2015). Impact of demographic transition on economic growth of Pakistan. Journal of Finance And Economics. 3(2) 44-50.
Kirk, D. (1996). Demographic Transition Theory. Population Studies. 50361-387. DOI: https://doi.org/10.1080/0032472031000149536
Levin, A., C.F. Lin and C.S.J. Chu (2002). Unit root tests in panel data: asymptotic and finite-sample properties. Journal of Econometrics. 108, 1-24. DOI: https://doi.org/10.1016/S0304-4076(01)00098-7
Li, Y. (2015). The relationship between fertility rate and economic growth in developing countries. Lund University, School Of Economics And Management, Master Thesis. 1-93.
Maddala, G. and S. Wu (1999). A Comparative Study of Unit Root Tests and a New Simple Test. Oxford Bulletin of Economics and Statistics. 61, 631-652. DOI: https://doi.org/10.1111/1468-0084.0610s1631
Manuk Ghazanchyan, J. G. (2015). A new look at the determinants of growth in Asian countries. International Monetary Fund. 1-33. DOI: https://doi.org/10.2139/ssrn.2672991
Menike, D. H. (2014). The impact of demographic transition on the economic growth and development in Sri-Lanka. Indian Journal Of Research In Management, Business And Social Sciences. 21(21) 1-5.
Parvakar Sahro, R. K. (2008). Economic growth in south Asia: Role of infrastructure. WORKING PAPER SERIES 2008, Institute Of Economic Growth, University Of Delhi. 1-35.
Quamrul H.Ashraf, D. N. (2013). The effect of fertility reduction on economic growth. Population And Development Review. 39(1). DOI: https://doi.org/10.1111/j.1728-4457.2013.00575.x
Sandip Sarker, A. K. (2016). Urban population and economic growth: south Asia perspective. European Journal Of Government And Economics. 5(1) 67-75. DOI: https://doi.org/10.17979/ejge.2016.5.1.4316
Shahjan Ali, K. J. (2015). An empirical analysis of population growth on economic development: The case study of Bangladesh. International Journal Of Economics, Finance And Management Sciences. 3(3) 252-259. DOI: https://doi.org/10.11648/j.ijefm.20150303.21
Sher Ali, A. A. (2013). The impact of population growth on economic development in Pakistan. Middle-East-Journal Of Scientific Research. 8(4) 483-491.
Song, S. (2013). Demographic changes and economic growth: Empirical evidence from Asia. Illinois Wesleyan University Economics Department. 1-35.
Temitope Sada Akintunde, P. A. (2013). Population dynamics and economic growth in sub-saharan-Africa. Journal Of Economics And Sustainable Development. 4(13) 148-157.
Thompson Warren S. (1929). Population. American Journal of Sociology. 34, 959–975 DOI: https://doi.org/10.1086/214874
Uddin, G. A., Alam, K. and Gow, J. (2016). Population Age Structure and Savings Rate Impacts on Economic Growth: Evidence from Australia. Economic Analysis and Policy, 52, 23-33. DOI: https://doi.org/10.1016/j.eap.2016.08.002
United Nations (2009) World Population Prospects: The 2008 Revision. New York: 2009b. Data online at http://esa.un.org/unpp/index.asp
Copyright (c) 2021 Nisar Ahmad, Sara Nayyab
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
CSRC Publishing and SBSEE adhere to Creative Commons Attribution-Non Commercial 4.0 International License. The authors submitting and publishing in SBSEE agree to the copyright policy under creative common license 4.0 (Attribution-Non Commercial 4.0 International). Under this license, the authors published in SBSEE retain the copyright including publishing rights of their scholarly work and agree to let others remix, tweak, and build upon their work non-commercially. All other authors using the content of SBSEE are required to cite author(s) and publisher in their work. CSRC Publishing and JAFEE follow an Open Access Policy for copyright and licensing.