Exploring the Impact of Population Aging on Economic Growth: Evidence from Selected Developed and Developing Countries

Shahid Adi; *Muhammad Awais Ur Rehman; Iman Asif

Authors

Shahid Adi Public Sector Specialist, Punjab Resource Improvement and Digital Effectiveness (PRIDE) Program-World Bank Funded, Government of the Punjab, Pakistan Author
*Muhammad Awais Ur Rehman M.PHIL Scholar, Department of Economics, University of Sargodha Author
Iman Asif Student BS (Economics), Lahore University of Management Sciences (LUMS) Lahore-Pakistan Author

Keywords:

Population, Aging, Economic Growth, Panel ARDL

Abstract

Population age structure is mainly impacted by economic changes, living standards and quality of life, pro-family policies, and advances in medical treatment. The present study investigates how population aging affects economic growth in selected developed and developing countries, specifically focusing on the impact of the aged dependency ratio, labor force participation rate, domestic savings and gross fixed capital formation (GFCF) on the GDP growth rate. The study utilizes panel data taken from the World Development Indicators (WDI), covering the period from 1971 to 2022. The estimation technique used is PMG (Pooled Mean Group) Panel ARDL (Autoregressive Distributed Lag) because the variables are integrated at different orders: some at level and others at first difference. The findings demonstrate that population ageing significantly slows growth process. However, the labor force participation rate, GFCF, and domestic savings positively contribute to economic progress.