Abstract:
The age structure and its effects on the economy are one of the major concerns
of both developed and developing countries in the world to get the maximum
contribution from every person to the economy toward economic growth and
economic development because humans are the resources with skills,
knowledge, and special capabilities, and they are the resources driving and
handling all other resources on the earth to fulfill human wants and needs. The
purpose of this study is to determine how people of various ages affect Sri
Lanka's economic growth from 1970 to 2020. Data for this study were
collected from the online databases of the Central Bank of Sri Lanka, World
Bank, and United Nations. The study considered gross domestic product as
the dependent variable, as well as the youth population, prime-working-age
population, middle-aged population, aged population, investment, inflation
rate, and general government final consumption expenditure as the
independent variables. And Views: 10 econometrics programs were used by
the researcher to analyze the data. Both Augmented-Dickey Fuller and Phillips
Perron unit root tests were done on the variables to check the stationarity of
the variables. Johansen Cointegration Test was employed to identify the longrun relationship, and the Vector Error Correction Model was used to find out
the short-run relationship and long-run adjustment. Further, the Granger
Causality Test and diagnostic tests have also been considered for the study.
According to the results of the Johansen Cointegration Test, the prime
working-age population (25–49) does not affect economic growth in the long
run, the youth population (15–24) has a significantly positive effect on
economic growth, and both the middle-aged population (50–64) and the aged
population (65 and above) have a significantly negative effect on the economy.
Based on the results of the VEC model, there is no short-run relationship
between the age structure variables and economic growth. Therefore, this
study suggests that the reforms and policies undertaken by the government
should prioritize increasing productivity from the various age cohorts and
expanding government expenditures on human capital.
