Validating the Effectiveness of Demographic Dividend Transmission Mechanisms on Economic Growth in Nigeria

  • Kehinde Ajike OLABIYI Department of Economics, Faculty of Social Sciences, Osun State University, Osogbo, Nigeria

Abstract

This paper determined and quantified the impact of demographic dividends on economic growth in Nigeria by investigating the interactions between demographic dividend transmission mechanisms and economic growth in the country. Data on working-age population ratio, savings rate, and education were obtained from the World Development Indicator database (1980-2014), while data on unemployment rate were obtained from various issues of Central Bank of Nigeria Statistical Bulletin. Unit root test was performed on each of the variables using Augmented Dickey Fuller (ADF) to test for the level of stationarity, while cointegration test was performed to determine the existence of long run relationship among the variables. The study applied Vector Auto Regression (VAR), exploring the method of impulse Response and variance Decomposition in analyzing the data.  The result of the unit root showed that the variables were stationary after first differencing, while the cointegration test confirmed the existence of long run relationship among the variables. The analysis, suggests a significant and an expansionary effect of working-age population ratio on economic growth. Also, by implication, an increase in employment rate spurs economic growth in the long run but insignificantly, while savings rate, and educational rate were shown to be weak in their impact on economic growth with unstable sign. The study therefore suggests that concerted efforts should be made by the government of Nigeria through her policies at influencing fertility rate to decline more rapidly thereby increasing the working-age population ratio. A broad set of employment generating policies that can help abridge unemployment and improve labor conditions for young adults should be implemented, and also there should be an adequate and appropriate reformation of the Nigerian financial sector to mobilize savings for productive use, while spending on education should also be made effective in raising the human capital of the educated

Published
Sep 18, 2018
How to Cite
OLABIYI, Kehinde Ajike. Validating the Effectiveness of Demographic Dividend Transmission Mechanisms on Economic Growth in Nigeria. Ife Social Sciences Review, [S.l.], v. 26, n. 1, p. 1-12, sep. 2018. ISSN 2635-375X. Available at: <http://issr.oauife.edu.ng/index.php/issr/article/view/45>. Date accessed: 20 sep. 2020.