Population Growth, Life Expectancy and Economic Growth: A Panel Data Analysis
Keywords:
Economic Growth, Life Expectancy, Population, Pooled Mean Estimator, Panel Data
Abstract
Over the years, quite a number of studies have investigated the apparent relationship between demographic factors and nations’ economic performance. However, these investigations have turned out diverse outcomes. This study therefore, contributes to the debate by examining the effect of population growth and life expectancy on economic growth using one hundred selected countries sub-grouped into very high income, high income, middle income and low income. The data set range from 2002 to 2017, and are sourced from the World Bank database. The variables engage include growth rate of real gross domestic product, gross fixed capital formation, life expectancy and population growth. The data are analysed using Imp, saran-Shin unit root technique, Kao cointegration test, Hausman test and pooled mean group (PMG) estimator to ascertain the stationarity of the variables, long run relationship, as well as the short run and long run unweight average of the individual nations. In sum, the PMG result reveals that, life expectancy, population growth and gross fixed capital formation, significantly predict economic growth in the long-run. Even so, both life expectancy and population growth rate negatively influenced economic growth. The implication of this is that, the two demographic factors are inversely associated with growth rate of gross domestic product in the sampled countries. The study therefore, recommends the need for sound policies initiation that will address these demographic variables changes to support economic advancement in the studied nations.
References
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Oyedokun, G. E. & Ajose, K. (2018). Domestic Investment and Economy Growth in Nigeria: An Empirical Investigation. International Journal of Business and Social Science, 9(2), 130-138.
Ozoh, F. O., Nwaka, I. D., Igberi, C. O. & Uma, K. E. (2016). The Influence of Investments on Economic Growth: The Case of Nigeria. International Journal of Research in Management, Economics and Commerce, 6(10), 29-39. ISSN 2250-057X.
Prettner, K., & Prskawetz, A. (2010). Demographic change in models of endogenous economic growth: A survey. Central European Journal of Operations Research, 18, 593-608.
Sayef, B. (2017). The Impact of Domestic Investment on Economic Growth: New Policy Analysis from Algeria. MPRA Paper No. 80053. Retrieved from https://mpra.ub.uni-muenchen.de/80053/
Schnabel, S. K., & Eilers, P. H. (2009). An analysis of life expectancy and economic production using expectile frontier zones. Demographic Research, 21, 109-134.
Škare, M., & Blažević, S. (2015). Population and Economic Growth: A Review Essay. Amfiteatru Economic Journal, 17(40), 1036-1053.
Solow, R. M. (1956). A contribution to the theory of economic growth. The quarterly Journal of Economics, 70, (1), 65.
Ahmed, R. N., & Ahmad, K. (2016). Impact of population on economic growth: A case study of Pakistan. Bulletin of Business and Economics (BBE), 5(3), 162-176.
Atanda, A. A., Aminu, S. B., & Alimi, O. Y. (2012). The role of population on economic growth and development: evidence from developing countries. Datatric Research Consulting, Nigeria. MPRA Paper No. 37966, 1-19. Retrieved from https://mpra.ub.uni-muenchen.de/37966/
Amade, P. & Ibrahim, B. (2019). Impact of population growth on economic growth in Africa: A dynamic panel data approach (1980 -2015). Available at SSRN: https://ssrn.com/abstract =3432263 or http://dx.doi.org/10.2139/ssrn.3432263
Barro, R. J. (1996). Three models of health and economic growth. Unpublished Manuscript, the Harvard University, Cambridge, MA.
Bloom, D. E., Canning, D. & Sevilla, J. (2001). The effect of health on economic growth: Theory and Evidence, NBER Working Paper No. 8587.
Boucekkine, R., Diene, B., & Azomahou, T. (2007). A closer look at the relationship between life expectancy and economic growth (No. 2007_24).
Castelló-Climent, A., & Doménech, R. (2008). Human capital inequality, life expectancy and economic growth. The Economic Journal, 118(528), 653-677.
Cervellati, M., & Sunde, U. (2011). Life expectancy and economic growth: the role of the demographic transition. Journal of economic growth, 16(2), 99-133.
Craig, C. L., & Bauman, A. E. (2014). The impact of the Vancouver Winter Olympics on population level physical activity and sport participation among Canadian children and adolescents: population based study. International journal of behavioral nutrition and physical activity, 11(1), 107.
Dao, M. Q. (2012). Population and economic growth in developing countries. International Journal of Academic Research in Business and Social Sciences, 2(1), 6.
Ecevit, E. (2013). The impact of life expectancy on economic growth: Panel cointegration and causality analyses for OECD countries. The International Journal of Social Sciences, 16(1), 1-14.
Ewubare D. B. & Worlu, L. K. (2020). Effect of Domestic Investment on Economic Growth in Nigeria (1990-2017). International Journal of Economics and Financial Management, 5(1),1-8. E-ISSN 2545-5966 P-ISSN 2695-1932. www.iiardpub.org
Hansen, C. W., & Lønstrup, L. (2015). The Rise in Life Expectancy and Economic Growth in the 20th Century. The Economic Journal, 125(584), 838-852.
lasen, S. & Lawson, D. (2007). The impact of population growth on economic growth and poverty reduction in Uganda, Diskussionsbeiträge, No. 133, 1-22. Georg August-Universität Göttingen, Volkswirtschaftliches Seminar, Göttingen. Retrieved from http://hdl.handle.net/10419/31966.
Im, K. S., Pesaran, M. H. & Shin, Y. (1997). `Testing for Unit Roots in Heterogeneous Panels', Mimeo, Department of Applied Economics, University of Cambridge.
Kelley, A. C., & Schmidt, R. M. (2001). Economic and demographic change: A synthesis of models, findings and perspectives. In N. Birdsall, A. C. Kelley, & S. W. Sinding (Eds.).
Maddison, A. (2006). The world economy. Volume 1: A Millennial Perspective, Volume 2: Historical Statistics. Paris: OECD.
Malthus, T. R. (1798). An Essay on the principle of population. J. Johnson, London.
Marhyar, H. (2016). Economic growth and life expectancy: the case of Iran. Studies in Business and Economics, 11(1), 80-87. DOI: 10.1515/sbe-2016-0007.
Mateo, Z. (2016). The Impact of Population Ageing on Public Finance in the Europe Union. University of Zagreb, Crotia.
Mierau, J. O., & Turnovsky, S. J. (2014). Demography, growth and inequality. Economic Theory, 55, 29-68.
Muhammad, R. T., Aldeehani, M. A. & Saleh, A. (2020). The relationship between domestic investment and quality economic growth in Thailand. International Journal for Quality Research, 14(3), 691–704. ISSN 1800-6450.
Ngangue, N. & Manfred, K. (2015). The impact of Life expectancy on economic growth in developing countries. Asian Economic and Financial Review, 5 (4), 653–660.
Ogungbenle, S., Olawumi, O. R. & Obasuyi, F. O. T. (2013). Life expectancy, public health spending and economic growth in Nigeria: a vector autoregressive (VAR) model. European Scientific Journal, 9(19), 210-235. ISSN: 1857–7881 (Print) e-ISSN 1857- 7431.
Ogunjimi, J. A. & Adebayo, A. O. (2018). Health expenditure, health outcomes and economic growth in Nigeria. MPRA Paper No. 94989. Retrieved from https://mpra.ub.uni-muenchen.de/94989/.
Ogunleye, O. O., Owola, O. A., & Mubarak, M. (2018). Population Growth and Economic Growth in Nigeria: An Appraisal. International Journal of Management, Accounting and Economics, 5(5), 282-299.
Oladayo, T. P. (2018). Population Growth and Life Expectancy in Nigeria: Issues and Further Considerations. Humanities and Social Science Research, 1(1), 30-40. ISSN 2576-3024 E-ISSN2576-3032. https://doi.org/10.30560/hssr.v1n1p30
Oyedokun, G. E. & Ajose, K. (2018). Domestic Investment and Economy Growth in Nigeria: An Empirical Investigation. International Journal of Business and Social Science, 9(2), 130-138.
Ozoh, F. O., Nwaka, I. D., Igberi, C. O. & Uma, K. E. (2016). The Influence of Investments on Economic Growth: The Case of Nigeria. International Journal of Research in Management, Economics and Commerce, 6(10), 29-39. ISSN 2250-057X.
Prettner, K., & Prskawetz, A. (2010). Demographic change in models of endogenous economic growth: A survey. Central European Journal of Operations Research, 18, 593-608.
Sayef, B. (2017). The Impact of Domestic Investment on Economic Growth: New Policy Analysis from Algeria. MPRA Paper No. 80053. Retrieved from https://mpra.ub.uni-muenchen.de/80053/
Schnabel, S. K., & Eilers, P. H. (2009). An analysis of life expectancy and economic production using expectile frontier zones. Demographic Research, 21, 109-134.
Škare, M., & Blažević, S. (2015). Population and Economic Growth: A Review Essay. Amfiteatru Economic Journal, 17(40), 1036-1053.
Solow, R. M. (1956). A contribution to the theory of economic growth. The quarterly Journal of Economics, 70, (1), 65.
Published
2022-08-28
Section
Articles
