The impact of population ageing on economic growth in developing countries: Panel ARDL evidence

Abstract

The study aims to analyse the economic effects of population ageing in Japan, Spain, Italy, the United States, South Korea, Germany, France, the United Kingdom, and Canada using the panel ARDL (Autoregressive Distributed Lag) model. GDP per capita was adopted as the dependent variable, while the independent variables included the proportion of the population over 65, health expenditure, the dependency rate, and the level of investment as a proportion of GDP. The results showed varying effects of ageing on economic growth. It had a positive impact in some of the countries under study (the USA, South Korea, and Germany) and a negative impact in others (Spain, Italy, and Japan). Health spending was also found to be an economic burden, while fixed investment was shown to be critical in supporting economic growth. The study recommends improving education and training to increase productivity, embracing innovation and technology, enhancing health systems through preventive care, and implementing flexible policies, such as encouraging women's participation in the labour market and promoting migration.