Demographic structure and economic growth:
An econometrics analysis for West Africa
DOI:
https://doi.org/10.46661/rev.metodoscuant.econ.empresa.11887Keywords:
demographic structure, economic growth, weighted least square, West AfricaAbstract
Demographic structure plays a crucial role in shaping economic growth, particularly in regions undergoing rapid population changes. West Africa, characterized by a young population, high fertility rates, and urbanization, presents both opportunities and challenges for economic development. While demographic transitions can generate economic dividends, inefficient labour markets and inadequate investments in human capital may hinder growth. This study examines the impact of demographic factors on economic growth in West Africa using econometric analysis. This research employs a panel data regression model to analyze the relationship between economic growth (measured by the logarithm of GDP per capita in levels) and key demographic variables, including age dependency ratio, labour force participation rate, population growth, urbanization, life expectancy, and health expenditure. Secondary data from 16 West African countries between 2000 and 2022 were obtained from the World Development Indicators. The study applies the Random Effects model and Weighted Least Squares regression to address heteroskedasticity and improve estimate efficiency. Findings reveal that a high age dependency ratio and rapid population growth negatively impact economic growth, while urbanization and life expectancy contribute positively. Labour force participation showed a weak negative effect, suggesting labour market inefficiencies. Interestingly, increased health expenditure was negatively associated with growth, indicating potential inefficiencies in resource allocation. The study highlights the complex relationship between demographics and economic growth in West Africa. Policies focusing on reducing dependency ratios, improving labour productivity, and ensuring efficient health investments are essential to harness demographic advantages and foster sustainable development.
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