The impact of population structure on economic growth in developing countries: An econometric analysis

Demographic structure is gaining increasing importance in econometric and development economics literature as both a fundamental determinant and a result of economic growth. In developing countries, changes in the age structure of the population, life expectancy, and dependency ratios directly affect production, consumption, and investment decisions; this situation directly affects long-term sustainable development processes by influencing the structural characteristics and functioning of economic structures. In particular, demographic changes such as population ageing, declining fertility rates, and increases in life expectancy at birth are developing in a way that both affects and is affected by economic structures, and can significantly alter the dynamics of growth. This process not only shapes the mechanisms of economic growth but also leads to fundamental transformations in its basic dynamics. In this context, a thorough and accurate analysis of the effects of demographic factors on economic growth is important for the formulation and implementation of sustainable development policies. This study aims to comprehensively examine the effects of demographic structure on economic growth using econometric methods, based on the economic and demographic indicators of 19 developing countries, using data from the period 1995-2023. The growth rate of per capita Gross Domestic Product (GDP) has been selected as the dependent variable, while the independent variables include total population, population aged 15-64, population aged 65 and over, life expectancy at birth, old-age and youth dependency ratios, trade's share of GDP, inflation rate, and net investment in non financial assets. This comprehensive set of variables reveals the multidimensional effects of the quantitative and qualitative characteristics of the population on economic growth. Panel data methods were used in the analyses, and models were constructed using the System Generalised Method of Moments (System GMM) technique, which is a dynamic panel data analysis technique. According to the results obtained, the proportion of the population aged 65 and over, the old-age dependency ratio, and life expectancy at birth did not show a statistically significant effect within the scope of the model. However, it was found that the total population variable had a negative and significant effect on growth. In conclusion, strategic planning for the age structure of the population, increasing investments in health and education, and designing policies that maximise the potential of the productive population will play a central role in achieving sustainable development goals in developing countries.