The Demographic Transition and Growth Nexus in Pakistan: Implications for Development Policy

Abstract

The study aims to analyze the impact of the demographic transition on economic growth in Pakistan. Pakistan is the fifth most populated country in the world. According to the National Institute Pakistan Economic Survey 2019-20 for Population Studies, the population projected for 2019 is 211.17 million. The current research uses time-series data for the period 1977 to 2019 and has applied the bounds testing approach to co-integration. The autoregressive distributed lag (ARDL) model has also been applied to analyze the long-run relationship with Error Correction Mechanism (ECM), to test for the existence of a sort-run association of demographic variables with economic growth. The study uses the gross domestic product as the dependent variable and gross domestic saving rate, health expenditure, life expectancy, and total literacyrate as independent variables. The findings of this empirical study indicate that there is a negative association between the gross domestic product and the gross domestic saving rate. However, there is a positive connection between gross domestic product and the independent variables like health expenditure, life expectancy, and total literacy rate. The study offers useful policy implications to policy makers in Pakistan and countries with similar socio-economic features.