Population Growth and Economic Development

Abstract

This research note describes a cross-sectional study of the relationship between population growth and GDP growth across 181 countries, including subsets of 51 emerging market countries and 36 low-income countries. The bivariate model produces a statistically significant result only for the entire sample, while a multivariate model additionally controlling for total factor productivity and gross fixed capital formation generates statistically significant betas for all countries and the subset of emerging market countries. Thus, although the model with three independent variables (population growth, total factor productivity, and gross fixed capital formation) does not apply to low-income countries, it contributes to an understanding of GDP growth in emerging market countries (r-squared = 0.56). The author tentatively concludes that population growth is conditionally associated with macroeconomic development where investments in technology support higher productivity.