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Age structural transition and economic growth: Evidence from South and Southeast Asia

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  • K. Navaneetham

    (Centre for Development Studies)

Abstract

Age structural transition is a process and a consequence of shiftingage structure from a young aged population to old aged population. It iswell known that economic growth in the East Asian countries wassignificantly contributed by demographic gift, that is decline in youngaged population and increase in working aged population. However,little is known about the role of age structure changes on economicgrowth in the context of South and Southeast Asia. In this paper anattempt has been made to study the nature and process of age structuraltransition in the countries of South (Bangladesh, India and Sri Lanka)and Southeast Asia (Indonesia, Malaysia, Philippines, Singapore andThailand). Further, this paper also attempts to study the influence of agestructure changes on the economic growth in these countries. Timeseries analysis covering the period 1950-92 has been used for studyingthe relationship between age structure and economic growth, controllingmacroeconomic variables such as investment share of GDP, net foreignbalance, share of public consumption expenditure, inflation rate and openness. The `demographic bonus' or `window of opportunity' had a positive impact on economic growth in all Southeast Asian countries except in the Philippines. The South Asian countries did not perform well in terms of economic growth at the onset of `window of opportunity'. The results also indicate that countries that have had open economies and had excellent human capital benefited more from the "window of opportunity". In the next 20-25 years, the window of opportunity is likely to benefit most South Asian countries if favourable policies are pursued to take advantage of this with opening up their economy. The demographic bonus will be available for another 15-20 years followed by a period of demographic turbulence in the Southeast Asian countries. There will be a faster growth in the old aged population after 15 years and stagnantion/decline in the working aged population. As the gaps between demographic indicators are narrowing among the Asian countries, the question remains whether demographic convergence will lead to economic convergence in the future. The demographic transition has given the South Asian countries an opportunity for economic convergence. However, whether that opportunity is realised will depend on whether socio-economic policies are favourable to economic growth.

Suggested Citation

  • K. Navaneetham, 2002. "Age structural transition and economic growth: Evidence from South and Southeast Asia," Centre for Development Studies, Trivendrum Working Papers 337, Centre for Development Studies, Trivendrum, India.
  • Handle: RePEc:ind:cdswpp:337
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    Cited by:

    1. Laishram Ladusingh & M.R. Narayana, 2012. "Demographic dividends for India: evidence and implications based on National Transfer Accounts," Chapters, in: Donghyun Park & Sang-Hyop Lee & Andrew Mason (ed.), Aging, Economic Growth, and Old-Age Security in Asia, chapter 7, pages 203-230, Edward Elgar Publishing.
    2. Lakshmana, C M, 2014. "Role of fertility in changing age structure in India: Evidence and implications," Working Papers 316, Institute for Social and Economic Change, Bangalore.
    3. Social Policy and Population Section, Social Development Division, ESCAP., 2014. "Asia-Pacific Population Journal Volume 29, No. 2," Asia-Pacific Population Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 29(2), pages 1-82, November.

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    More about this item

    Keywords

    Age structure; window of opportunity; economic growth; open economy; South Asia; Southeast Asia;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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