Demographic structure, structural change, and economic growth: panel evidence in sub-Saharan African countries

Abstract

In the face of rapid demographic transitions, Sub-Saharan African countries stand at a critical juncture where the potential for harnessing a demographic dividend to fuel economic growth is immense. This demographic shift presents both challenges and opportunities, with the right investments in health, education, and employment, countries can turn the growing youth population into a powerful engine for development, driving substantial and sustainable economic progress across the region. This study examines the demographic structure effect on economic growth in the context of structural changes in 26 sub-Saharan African countries. Using data from 1992 to 2019 in the PMG-ARDL, FMOLS, and DOLS estimates, we find that demographic structure has a positive influence on economic growth in the long run, which occurs through effective structural change, that is, structural changes that occur with an increase in labor productivity growth. Indeed, our results show that structural changes are relevant in transforming African youth debt into demographic dividends.