Impact of Dependency Ratio on Economic Growth: Evidence from Selected Asian Countries

Abstract

Dependency ratio affects economic growth, with a particular emphasis on the developing and developed countries of South and East Asian regions. The study used the FMOLS method to examine the bond among, dependency ratio and  economic growth, using “un balanced panel data” covering 5 developing countries of South Asian region including (Pakistan, India, Sri-Lanka, Bangladesh, Bhutan  and  five developed countries of East Asian region including (Japan, South Korea, Singapore, Macau. This study is done for the period of 1971-2022.GDP per capita, a gauge of economic growth, is the dependent variable, whereas independent variable is YDR, ODR, FDI and GDPDEF. The empirical results of the study show that both young and old dependents has adverse effect on  economic growth both wealthy and emerging nations of Asia and positively impacted by FDI while GDPDEF has adverse impact on GDP Per capita. This study found that in emerging nations young age dependents is greater than developed countries while old dependency ratio is greater in developed countries as compared to developing countries.