The Nexus between Population Structure, Debt Ratio, Unemployment, and Leadership Election in Aging Countries

Abstract

For the past decades, aging of population has been a growing concern for many countries, imposing downward pressure on consumption, production, and population growth. Meanwhile, voters in aging countries, influenced by socioeconomic conditions like higher age dependency ratio, rising unemployment rate, constant inflow of immigration and lower fertility rate, might have specific preferences for the corresponding policy targets purposed by the leadership election candidates and might further affect the economic and immigration policies implemented by the new governments after elections. With the investigation of how the preferences of the voters for economic and immigration policies, sharped by the socioeconomic conditions, affect the implementation of the corresponding policies after leadership elections, candidates of these elections might be capable of gaining more support from voters by modifying their election platform, accordingly. In this study, three multinomial logistic models are conducted with government expenditure, taxation, and immigration policies set as dummy dependent variables, separately. And the results imply that, in aging countries, a high level of unemployment tends to induce the new governments to impose more stringent immigration policy and reduce taxation, while the possibility of a decrease of government expenditure would be higher. However, for countries with higher population growth, the new governments would be more likely to implement a tax increase.