The contributions of demographic factors to economic growth

Abstract

In this paper, an updated approach to evaluate the contribution of demographic factors to economic development is proposed. The forecasted shifts in public production were considered with respect to the institutional framework. The relationship between the main demographic variables and the economic growth for the sample of 45 advanced and emerging market economies from 1990 to 2018 was examined, applying the unbalanced panel data method. Over the period, in the sample, an essential increase in life expectancy adversely affected the real GDP per capita growth rate. The empirical investigation pointed out that the above demographic variable was strongly linked to nominal GDP per capita. In advanced economies, the examined demographic indicator was considerably higher than in emerging ones. We found out that an increase in the working-aged stratum substantially reduced the real GDP dynamics, but that interconnection was not robust. In the long-run, the institutional framework should be taken into account to achieve favorable public performance. Demographic variables should be forecasted and calibrated, regarding the endogenous economic triggers. Both public and private investments matter.