An analysis of the interdependence of demographic factors, labour effort and economic growth in Ireland

Abstract

Original citationAn analysis of the interdependence of demographic factors, labour effort and economic growth in Ireland", International Journal of Social Economics, Vol. An Analysis of the Interdependence of Demographic Factors, Labour Effort and Economic Growth in IrelandAbstract Purpose -The purpose of this article is to analyse the effects of a declining birth rate and an increasing old age-population ratio on Ireland's economic output. Design-Methodology/Approach -This paper utilises data on the birth rate, old-age population ratio, economic output and labour effort of the Irish economy to estimate a vector-autoregressive model. The results of this model are then analysed to test for the presence of Granger causality among these variables. In doing so it is possible to assess whether there are statistically significant causal relationships existing among these factors. Subsequently, impulse response functions are derived from this model in order to assess the magnitude of the causal relationships. Findings -The results suggest that declining fertility rates and increases in the old-age dependency ratio have a significant impact on labour effort and economic output. Labour effort is also found to explain variation in the fertility rate and economic output. Economic output is found to effect labour effort and the fertility rate. Social Implications -The results derived in this paper raise interesting policy implications. It is evident that Ireland's declining birth rate and increasing old-age population ratio are creating a demographic situation which will have implications for future economic growth. Policies need to be put in place to mitigate the negative effects these factors will have on Irish growth. Originality/Value -This paper adopts modern econometric techniques to assess the causal relationships which exist between the demographic and economic factors considered. These have not previously been applied to the Irish situation. In doing this, this paper provides an important insight into the changing dynamics of the Irish economy.

Do Macroeconomic Variables and Effective Fiscal Policies Affect Indonesian Economic Development?

“…The effect of population on economic growth can be seen in Table I. The results of this study are also supported by research conducted by Ibhagui (2020), Rahman et al (2017) and Doran (2012), they conclude that additional population encourages economic growth, or population addition has a positive effect on economic growth.…”

“…Both Nelson and Leibenstein show that rapid population growth in developing countries means that the level of people's welfare does not significantly improve and in the long run reduces welfare. On the other hand, research by Doran (2012), entitled "Analysis of the interdependence of demographic factors, labor effort and economic growth in Ireland". This study analyzes the causal relationship between demographic changes in Ireland and labor effort and economic development.…”

Analisis Perkembangan Penduduk Terhadap Tingkat Partisipasi Angkatan Kerja Di Indonesia

“…Berdasarkan penelitian yang dilakukan oleh Caldwell & Schindlmayr (2003) yang menunjukkan bahwa tingkat kesuburan di ekonomi modern turun di bawah tingkat penggantian, yang mengakibatkan proporsi populasi yang terus meningkat termasuk dalam kategori usia tua. Doran (2012) menunjukkan bahwa tingkat kesuburan memiliki dampak kausal yang signifikan pada perkembangan ekonomi suatu negara dengan fungsi respons impuls yang menunjukkan bahwa kejutan kesuburan positif menyebabkan penurunan output ekonomi. Namun, dalam jangka panjang, tingkat kesuburan yang menurun ini mungkin memiliki konsekuensi serius melalui transformasi demografis lain, yaitu peningkatan rasio ketergantungan hari tua.…”

“…Mengingat kekhawatiran yang meluas bahwa memiliki populasi yang lebih tua membebani sumber daya masyarakat, beberapa indeks telah dikembangkan untuk meringkas beban penuaan di berbagai negara (Skirbekk et al, 2022). Doran (2012) menyampaikan bahwa peningkatan rasio ketergantungan hari tua akan mengakibatkan penurunan total jam kerja. Hasil ini mungkin merupakan manifestasi dari pengurangan proporsi populasi dalam kategori usia kerja.…”