ESSAYS ON DEMOGRAPHIC DYNAMICS, AGEING, AND ECONOMIC GROWTH

Abstract

The impact of age structural transformation on long-term economic performance is one of the most important issues at the nexus of demography and economics. This is likely because different age groups contribute differently to the economy. Populations production and consumption habits are influenced by age structures based on the consumption behaviours they engage in and the economic choices they make during their life cycle. Thus, disaggregating the roles of these various age cohorts has been a major advancement over the classical theory inquiry and convergence phenomena in the recent decades. Based on this theoretical notion, the present thesis examines first the role of age structure in shaping the income level across countries, secondly causality between ageing and income in long run using potential support ratio, and finally demographic dynamics in Indian settings with particular emphasis on population ageing. This dissertation comprises several chapters that delve into the intricate relationship between demographic dynamics and income growth. Chapter two focuses on measuring demographic dynamics, with particular emphasis on age structural transformation's pivotal role in influencing income growth. The study highlights robust positive effects of demographic dynamics, particularly demographic productivity, and population ageing, which demonstrate significant associations with per capita income levels. These findings align with existing literature and withstand rigorous robustness checks. Chapter three investigates the causal link between income and ageing, using the potential support ratio as a key measure. The analysis reveals positive and significant lagged effects of potential support ratio on income. However, establishing a definitive causal relationship between income and ageing remains elusive and inconclusive. Nevertheless, the study's validity is strengthened by robustness checks and instrument variable approaches, which consistently support the main findings across various scenarios. Furthermore, the research underscores the significance of saving and life expectancy in understanding the nexus between ageing and income growth.