In . J . o Con emp. Res. in Mul i. Volume 4 Issue 1 [Jan- Feb] Yea 2025
249
© 2025 B. Vijay Raj, D . K. Su esh. This is an open-access a icle dis ibu ed unde he e ms o he C ea i e Commons A ibu ion 4.0 In e na ional
License (CC BY NC ND). h ps://c ea i ecommons.o g/licenses/by/4.0/
Resea ch A icle
Demog aphic D i e s o Economic G ow h: A Compa a i e Pooled
S udy o India and China
B. Vijay Raj 1*, D . K. Su esh 2
1 PhD (Pa -Time) Resea ch Schola , PG & Resea ch Depa men o Economics,
Ramak ishna Mission Vi ekananda College (Au onomous), Mylapo e, Chennai, Tamil Nadu, India
2 Assis an P o esso PG & Resea ch Depa men o Economics, Ramak ishna Mission Vi ekananda College
(Au onomous), Mylapo e, Chennai, Tamil Nadu, India
Co esponding Au ho : *B. Vijay Raj DOI: h ps://doi.o g/10.5281/zenodo.17663288
Abs ac
Manusc ip In o ma ion
This s udy in es iga es he ela ionship be ween popula ion dynamics and economic
g ow h in India and China o e he pe iod 1960 o 2023, ocusing on majo
demog aphic indica o s such as popula ion g ow h, bi h a es, wo king-age popula ion
sha e, elde ly popula ion p opo ion, and age dependency a ios. Using pooled OLS
eg ession analysis, he esea ch e alua es how demog aphic ansi ions ha e
in luenced economic ou comes in he wo as es -g owing Asian economies. The
indings indica e ha an expanding wo king-age popula ion has played a c ucial ole in
accele a ing GDP g ow h, pa icula ly in India, whe e he demog aphic di idend
con inues o p o ide economic ad an ages. In con as , China’s ea ly demog aphic
ansi ion, shaped signi ican ly by i s one-child policy, has led o a apidly ageing
popula ion, ising dependency bu dens, and eme ging labou sho ages. These
demog aphic shi s pose long- e m challenges o sus aining g ow h. The s udy
highligh s ha in es men s in educa ion, heal hca e, and skill de elopmen a e essen ial
o maximise he bene i s o demog aphic changes. I u he sugges s ha India can
lea n aluable lessons om China’s expe ience in managing demog aphic ansi ions
o ensu e sus ainable de elopmen . O e all, his compa a i e analysis o e s impo an
insigh s o policymake s aiming o align popula ion ends wi h long- e m economic
planning and achie e balanced, inclusi e g ow h in bo h coun ies.
▪ ISSN No: 2583-7397
▪ Recei ed: 16-01-2025
▪ Accep ed: 19-02-2025
▪ Published: 26-02-2025
▪ IJCRM:4(1); 2025: 249-257
▪ ©2025, All Righ s Rese ed
▪ Plagia ism Checked: Yes
▪ Pee Re iew P ocess: Yes
How o Ci e his Manusc ip
Raj B V, Su esh K. Demog aphic d i e s o
economic g ow h: a compa a i e pooled
s udy o India and China. In J Con emp
Res Mul idiscip. 2025;4(1):249-257.
KEYWORDS: Demog aphic T ansi ion, Popula ion Dynamics, Economic G ow h, Wo king-Age Popula ion, Ageing Popula ion,
Dependency Ra io, Pooled OLS Analysis, Demog aphic Di idend, India, China, Policy Implica ions
In . J . o Con emp. Res. in Mul i. Volume 4 Issue 1 [Jan- Feb] Yea 2025
250
© 2025 B. Vijay Raj, D . K. Su esh. This is an open-access a icle dis ibu ed unde he e ms o he C ea i e Commons A ibu ion 4.0 In e na ional
License (CC BY NC ND). h ps://c ea i ecommons.o g/licenses/by/4.0/
1. INTRODUCTION
The ela ionship be ween popula ion dynamics and economic
g ow h has long been a ocus o academic and policy discou se,
pa icula ly in populous coun ies like India and China. These
wo na ions, which ep esen he la ges popula ions globally,
p o ide a unique oppo uni y o s udy how demog aphic
ansi ions in luence economic ajec o ies. While bo h coun ies
ha e unde gone signi ican popula ion shi s since he 1960s,
hei app oaches o managing demog aphic changes ha e a ied
subs an ially. China implemen ed igo ous popula ion con ol
measu es, including he one-child policy in oduced in 1979,
which expedi ed i s
demog aphic ansi ion. India, on he o he hand, has expe ienced
a mo e g adual decline in e ili y and a delayed demog aphic
di idend, esul ing in a di e en se o economic ou comes.
Demog aphic ansi ions, cha ac e ised by shi s in age s uc u e,
including an expanding wo king-age popula ion, declining bi h
a es, and an inc easing sha e o he elde ly, ha e signi ican
implica ions o economic pe o mance. Coun ies in he hi d
s age o demog aphic ansi ion o en expe ience a “demog aphic
di idend”—a phase whe e a la ge sha e o he popula ion en e s
he wo k o ce, educing dependency a ios and po en ially
accele a ing economic g ow h. Howe e , he ex en o which his
di idend is ealised depends on e ec i e policy in e en ions,
in es men s in heal h, educa ion, and skill de elopmen , and he
abili y o sus ain p oduc i i y.
Figu e 1 illus a es he popula ion g ow h a es o India and
China om 1960 o 2023. While bo h coun ies show a s eady
decline in g ow h a es, China’s popula ion g ow h a e
dec eased sha ply a e he in oduc ion o he one-child policy,
compa ed o India’s mo e g adual decline. This di e gence
highligh s he con as ing popula ion policies adop ed by he wo
na ions.
Sou ce: Au ho ’s Calcula ion based on Wo ld Bank Da a
Figu e 2 shows he ends in bi h a es o India and China o e
he same pe iod. China expe ienced a apid decline in bi h a es
pos -1979, e lec ing he di ec impac o i s s ic popula ion
policy con ol measu es. India’s bi h a es, hough declining,
ollowed a slowe ajec o y, consis en wi h i s mo e g adual
demog aphic ansi ion.
-0.5
0
0.5
1
1.5
2
2.5
3
1960
1963
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
2011
2014
2017
2020
2023
Popula ion G ow h Ra e
Pop G ow h Ra e China Pop G ow h Ra e _India
In . J . o Con emp. Res. in Mul i. Volume 4 Issue 1 [Jan- Feb] Yea 2025
251
© 2025 B. Vijay Raj, D . K. Su esh. This is an open-access a icle dis ibu ed unde he e ms o he C ea i e Commons A ibu ion 4.0 In e na ional
License (CC BY NC ND). h ps://c ea i ecommons.o g/licenses/by/4.0/
Sou ce: Au ho ’s Calcula ion based on Wo ld Bank Da a
Figu es 3 illus a e he ends in wo king-age popula ions o
China and India. China’s wo king-age popula ion expanded
apidly du ing he la e 20 h cen u y, peaking a ound 2010, and
has since begun o decline. In con as , India’s wo king-age
The popula ion con inues o g ow s eadily, e lec ing i s ongoing
demog aphic ansi ion. This di e gence in ends has c i ical
implica ions o wo k o ce p oduc i i y and economic ou pu ,
wi h India poised o bene i om a longe demog aphic di idend
compa ed o China.
Sou ce: Au ho ’s Calcula ion based on Wo ld Bank Da a
Figu e 4 p esen s he elde ly dependency a ios o bo h
coun ies. I e eals ha China’s elde ly popula ion has g own
signi ican ly as e han India’s, a byp oduc o i s ea lie
demog aphic ansi ion. This end unde sco es he challenges o
an ageing popula ion, including inc eased economic dependency
and heal hca e demands.
0
5
10
15
20
25
30
35
40
45
50
1960
1963
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
2011
2014
2017
2020
2023
Bi h Ra e
Bi h Ra e China Bi h Ra e_India
0
10
20
30
40
50
60
70
80
1960
1963
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
2011
2014
2017
2020
2023
Wo king Age Popula ion
Wo king Age pop_ China Wo king age Pop_India
In . J . o Con emp. Res. in Mul i. Volume 4 Issue 1 [Jan- Feb] Yea 2025
252
© 2025 B. Vijay Raj, D . K. Su esh. This is an open-access a icle dis ibu ed unde he e ms o he C ea i e Commons A ibu ion 4.0 In e na ional
License (CC BY NC ND). h ps://c ea i ecommons.o g/licenses/by/4.0/
Sou ce: Au ho ’s Calcula ion based on Wo ld Bank Da a
China’s apid economic g ow h has been widely a ibu ed o i s
demog aphic policies, obus indus ial sec o , o eign di ec
in es men , and ade libe alisa ion. In con as , India’s
economic g ow h has been d i en mo e by i s se ice sec o ,
wi h a less p onounced impac o demog aphic changes on i s
GDP g ow h. Acco ding o Wo ld Bank da a, China’s pe capi a
income has inc eased se en old since he 1990s, signi ican ly
ou pacing India’s wo old g ow h du ing he same pe iod.
Addi ionally, China has managed o educe i s po e y le els
mo e e ec i ely han India, showcasing he po en ial o s a egic
demog aphic and economic policies. Despi e sha ing simila
demog aphic oppo uni ies, he wo coun ies di e in hei
abili y o ha ness he demog aphic di idend. S udies highligh
ha while he wo king-age popula ion posi i ely impac s GDP
g ow h, ising elde ly dependency a ios and limi ed
p oduc i i y among he you h in some egions pose challenges.
This pape seeks o analyze he impac o demog aphic changes
on economic g ow h in India and China, ocusing on key ac o s
such as GDP g ow h a e, popula ion g ow h, bi h a e,
wo king-age popula ion, elde ly popula ion sha e, and
dependency a ios. The s udy also compa es he popula ion
policies o bo h na ions o unde s and how hese policies ha e
shaped hei demog aphic ansi ions and economic ajec o ies.
By examining he successes and challenges aced by each
coun y, his esea ch aims o p o ide ac ionable insigh s o
le e aging demog aphic ends o achie e sus ainable economic
de elopmen .
2. REVIEW OF LITERATURE
The ela ionship be ween popula ion dynamics and economic
g ow h has been ex ensi ely explo ed in economic li e a u e,
wi h he demog aphic ansi ion heo y se ing as a ounda ional
amewo k. This heo y posi s ha coun ies ansi ion om high
bi h and dea h a es o lowe a es as hey de elop, leading o
shi s in popula ion g ow h pa e ns and economic ou comes
(Bloom & Williamson, 1998). Du ing his p ocess, as e ili y
a es decline and li e expec ancy ises, an expansion o he
wo king-age popula ion occu s, po en ially esul ing in a
"demog aphic di idend"—a pe iod when economic g ow h
accele a es due o a la ge sha e o p oduc i e wo ke s (Bloom,
Canning, & Se illa, 2003).
S udies ha e shown ha Eas Asian coun ies, pa icula ly
China, le e aged hei demog aphic di idend du ing he la e
20 h cen u y o achie e apid economic g ow h. Fac o s such as
inc eased labo pa icipa ion, capi al accumula ion, and
imp o ed p oduc i i y played a signi ican ole in ansla ing
demog aphic ad an ages in o economic ou comes (Cai, 2010).
Simila ly, Mason (2001) emphasized he impo ance o sound
economic policies and in es men s in educa ion and heal h as
c i ical enable s o coun ies o capi alize on hei demog aphic
po en ial. India’s demog aphic ansi ion has been mo e g adual,
wi h economic bene i s expec ed o pe sis o e he coming
decades (James, 2008). Howe e , challenges emain,
pa icula ly ega ding job c ea ion, skill de elopmen , and
egional dispa i ies in demog aphic oppo uni ies (Aiya &
Mody, 2011). In con as , China aces a sh inking wo k o ce and
a apidly ageing popula ion due o i s one-child policy, aising
conce ns abou economic s agna ion and dependency bu dens
(Cai & Lu, 2013). Lee and Mason (2010) a gue ha ising old-
age dependency a ios can o se he bene i s o a g owing
wo king-age popula ion by inc easing heal hca e and pension
cos s. O he s udies, such as Kelley and Schmid (2005),
highligh he signi icance o in es men s in human capi al and
go e nance o sus ain he bene i s o demog aphic changes.
Despi e ex ensi e li e a u e on hese aspec s, compa a i e
s udies ocusing on India and China emain limi ed. This s udy
add esses his gap by examining how demog aphic changes ha e
0
5
10
15
20
25
1960
1963
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
2011
2014
2017
2020
2023
Elde ly Dependency Ra io
Elde dependency Ra io China Elde dependency Ra io _india
In . J . o Con emp. Res. in Mul i. Volume 4 Issue 1 [Jan- Feb] Yea 2025
253
© 2025 B. Vijay Raj, D . K. Su esh. This is an open-access a icle dis ibu ed unde he e ms o he C ea i e Commons A ibu ion 4.0 In e na ional
License (CC BY NC ND). h ps://c ea i ecommons.o g/licenses/by/4.0/
in luenced economic g ow h in bo h coun ies, o e ing
ac ionable insigh s o policymake s.
3. OBJECTIVES
The p ima y objec i e o his s udy is o analyse he impac o
popula ion dynamics on economic g ow h in India and China
o e he pe iod 1960 o 2023. Speci ically, he s udy aims o:
1. Compa e he demog aphic ansi ions o India and China
and examine hei in luence on GDP g ow h, ocusing on
di e ences in economic ou comes due o a ia ions in
popula ion g ow h, bi h a es, and wo king-age popula ion
ends.
2. E alua e he ole o he wo king-age popula ion in d i ing
economic g ow h and assess whe he bo h coun ies ha e
bene i ed om a demog aphic di idend, wi h a pa icula
ocus on India’s ecen g ow h phase and China’s ea lie
demog aphic shi .
3.1 Hypo heses
1. H1: A highe wo king-age popula ion posi i ely con ibu es
o GDP g ow h.
2. H2: G oss ixed capi al o ma ion (GFCF) has a signi ican
posi i e impac on GDP.
3. H3: Dependency a ios (young and elde ly) nega i ely a ec
GDP due o economic bu dens.
4. DATA AND RESEARCH METHODOLOGY
This s udy employs a quan i a i e app oach, using pooled
o dina y leas squa es (OLS) eg ession analysis o in es iga e
he demog aphic-economic nexus in India and China o e he
pe iod 1960 o 2023. By adop ing a compa a i e amewo k, he
esea ch explo es di e ences in demog aphic ansi ions and
economic g ow h pa e ns in he wo coun ies. Da a o he
analysis is sou ced om eliable da abases, including he Wo ld
Bank, he In e na ional Mone a y Fund (IMF), he Uni ed
Na ions Popula ion Di ision, and OECD s a is ics. The
dependen a iable in he pooled OLS analysis is GDP g ow h
a e, wi h addi ional models inco po a ing GDP pe capi a g ow h
as a obus ness check. The independen a iables include
popula ion g ow h a e, wo king-age popula ion, elde ly
popula ion sha e, bi h a e, old-age dependency a io, and g oss
ixed capi al o ma ion (GFCF) as a pe cen age o GDP,
ep esen ing demog aphic and economic ac o s essen ial o
unde s anding g ow h ajec o ies. The pooled OLS eg ession
model iden i ies sha ed pa e ns and coun y-speci ic di e ences
in he demog aphic-economic nexus, allowing o compa a i e
insigh s. To add ess po en ial mul icollinea i y, ad anced
echniques such as Ridge Reg ession and P incipal Componen
Analysis (PCA) a e employed in supplemen a y analyses,
ensu ing obus esul s. This app oach highligh s he impac o
demog aphic ansi ions on economic g ow h and o e s
ac ionable ecommenda ions o policymake s in bo h coun ies.
The pooled OLS eg ession model is o mula ed as:
log(GDPi ) =
0 +
1log(Wo king Age Popi ) +
2log(GFCFi ) +
3log(Bi h Ra ei ) +
3log(Young Dependency) +
i .
Whe e i ep esen s he coun y (India o China), ep esen s he
yea and
cap u es he e o e m.
By pooling da a om India and China, he s udy iden i ies
sha ed pa e ns and coun y-speci ic dynamics in he
demog aphic-economic ela ionship. The me hodology ensu es
obus insigh s in o he ole o demog aphic ac o s in shaping
economic g ow h while add essing mul icollinea i y using
ad anced s a is ical echniques such as Ridge Reg ession and
P incipal Componen Analysis (PCA) in supplemen a y
analyses.
5. Modelling o Es ima ion
The s udy employs h ee key models o es ima e he ela ionship
be ween demog aphic dynamics and economic g ow h in India
and China. The P ima y T ans o med Model (Reduced) uses
log- ans o med da a o no malise a iables and esol e
mul icollinea i y, ensu ing obus es ima es. The Supplemen a y
Model (Full T ans o med) inco po a es addi ional a iables
while e aining mul icollinea i y, p o iding a b oade bu less
s able analysis. The Un ans o med Model
(Compa ison) cap u es aw ela ionships be ween a iables and
GDP wi hou any ans o ma ions, se ing as a baseline o
compa ison.
5.1 P ima y Model: T ans o med and Reduced
The esul s o he p ima y model a e p esen ed below. This
model p o ides clea and in e p e able insigh s in o he
demog aphic-economic ela ionship.
Table 1: Pooled OLS Reg ession Es ima es (T ans o med and Reduced Va iables)
Va iable
Coe icien
S d. E o
-S a is ics
p-Value
Signi icance
Cons an
35.3535
4.482
7.865
0.000
Highly Signi ican
GFCF
1.2958
0.775
1.662
0.097
Ma ginally Signi ican
Bi h Ra e
2.6146
0.663
3.941
0.000
Highly Signi ican
Young Dependency
-4.0473
0.664
-6.636
0.000
Highly Signi ican
Sou ce: Au ho ’s Calcula ion
The p ima y ans o med model p o ides aluable insigh s in o
how demog aphic ac o s in luence economic g ow h. A 1%
inc ease in he bi h a e is associa ed wi h a 2.61% ise in GDP,
highligh ing i s c i ical ole in popula ion eplenishmen and
sus ained g ow h. Con e sely, a 1% ise in he young
dependency a io educes GDP by 4.41%, e lec ing he
economic bu den o a la ge dependen you h popula ion. G oss
ixed capi al o ma ion (GFCF), al hough ma ginally signi ican ,
shows a posi i e associa ion wi h GDP, emphasising he
impo ance o in as uc u e and capi al in es men . Wi h an R2
alue o 0.469, he model explains 46.9% o GDP a ia ion,
unde sco ing he signi icance o demog aphic ansi ions. These
esul s highligh he need o a ge ed in es men s in educa ion,
In . J . o Con emp. Res. in Mul i. Volume 4 Issue 1 [Jan- Feb] Yea 2025
254
© 2025 B. Vijay Raj, D . K. Su esh. This is an open-access a icle dis ibu ed unde he e ms o he C ea i e Commons A ibu ion 4.0 In e na ional
License (CC BY NC ND). h ps://c ea i ecommons.o g/licenses/by/4.0/
skill de elopmen , and in as uc u e o educe dependency
bu dens and ully capi alise on demog aphic di idends.
Policymake s mus align s a egies o enhance he wo k o ce's
p oduc i i y and mi iga e challenges posed by dependency a ios
o sus ained economic g ow h.
5.2 Supplemen a y Sec ion: T ans o med Model wi h
Mul icollinea i y
The supplemen a y ans o med model, which inco po a es
addi ional demog aphic a iables, p o ides a mo e expansi e
iew o he ela ionship be ween popula ion dynamics and GDP.
The esul s indica e a highly signi ican posi i e impac o he
wo king-age popula ion (β=41.83, p<0.01) and bi h a e
(β=5.00, p<0.01) on economic g ow h. G oss ixed capi al
o ma ion (GFCF) is also signi ican (β=0.97, p<0.05),
unde sco ing he ole o in as uc u e and capi al in es men s.
Con e sely, he elde ly dependency a io (β=−3.80, p<0.01) and
young dependency a io (β=−-2.63, p<0.01) show signi ican
nega i e ela ionships wi h GDP, e lec ing he economic
bu dens o hese dependen popula ions. Popula ion g ow h a e,
howe e , emains s a is ically insigni ican (p>0.05). The model
achie es an R2 o 0.646, explaining 64.6% o he a ia ion in
GDP, indica ing a s ong o e all i .
Table 2. Pooled OLS Reg ession Es ima es (T ans o med Va iable wi h mul icollinea i y)
Va iable
Coe icien
S d.
E o
-S a is ics
p-
Value
Signi icance
Cons an
-3.442419
50.414
-6.828
0.000
Highly Signi ican
GFCF
0.9714
0.713
1.362
0.0176
Signi ican
Bi h Ra e
5.0027
0.856
5.845
0.000
Highly Signi ican
Young Dependency
-2.6290
0.664
-3.959
0.000
Highly Signi ican
Wo king Age Popula ion
41.8288
8.443
4.9601
0.001
Highly Signi ican
Elde ly Dependency
-3.7966
1.819
-2.0871
0.003
Highly Signi ican
Popula ion g ow h a e
-2.037
0.894
-2.278
0.370
Insigni ican
Sou ce: Au ho ’s Calcula ion
Al hough he model p o ides a high R-Squa e, he p esence o
mul icollinea i y (as e idenced by high VIF alues) se e ely
unde mines he eliabili y o i s coe icien es ima es.
Mul icollinea i y in la es s anda d e o s and des abilises
coe icien alues, making i challenging o a ibu e speci ic
impac s o indi idual a iables accu a ely.
To add ess mul icollinea i y and p o ide deepe insigh s in o he
demog aphic-economic ela ionship, his sec ion p esen s he
esul s o Ridge Reg ession and P incipal Componen Analysis
(PCA). These me hodologies complemen he p ima y analysis
by s abilising coe icien es ima es (Ridge Reg ession) and
educing dimensionali y o ocus on unco ela ed componen s
(PCA). Ridge Reg ession in oduces a penal y e m (α) o add ess
mul icollinea i y by sh inking coe icien s. This me hod e ains
all a iables, ensu ing in e p e abili y while mi iga ing in la ed
s anda d e o s caused by highly co ela ed p edic o s
Table 3: Ridge Reg ession
Va iable
Coe icien
GFCF
0.43
Bi h Ra e
5.00
Young Dependency
-1.63
Wo king Age Popula ion
18.89
Elde ly Dependency
-3.10
Popula ion g ow h a e
-0.80
Sou ce: Au ho ’s Calcula ion
The Ridge Reg ession esul s demons a e ha he wo king-age
popula ion and bi h a e posi i ely con ibu e o GDP, while he
elde ly dependency and young dependency a ios ha e nega i e
impac s, e lec ing he economic bu den o dependen s. GFCF,
while posi i e, has a educed e ec due o i s ma ginal
signi icance.
P incipal Componen Analysis:
PCA ans o ms he da ase in o unco ela ed componen s ha
explain he majo i y o he a iance. Fo his analysis, he i s
h ee componen s accoun o 95% o he o al a iance.
Table 4: PCA wi h Explained Va iance
P incipal Componen
Explained Va iance (%)
PC1
47.82
PC2
28.12
PC3
19.06
Sou ce: Au ho ’s Calcula ion
In . J . o Con emp. Res. in Mul i. Volume 4 Issue 1 [Jan- Feb] Yea 2025
255
© 2025 B. Vijay Raj, D . K. Su esh. This is an open-access a icle dis ibu ed unde he e ms o he C ea i e Commons A ibu ion 4.0 In e na ional
License (CC BY NC ND). h ps://c ea i ecommons.o g/licenses/by/4.0/
The i s p incipal componen (PC1) cap u es 47.82% o he
a iance, p ima ily e lec ing he combined e ec s o
demog aphic ac o s. Toge he wi h PC2 and PC3, hese
componen s e ec i ely summa ise he da a while add essing
mul icollinea i y.
PCA Reg ession Resul s:
The ans o med p incipal componen s we e used as p edic o s in
a eg ession model o e alua e hei ela ionship wi h GDP.
Table 5: PCA Reg ession Resul
Va iable
Coe icien
S d. E o
-S a is ics
p-Value
Signi icance
Cons an
0.4855
0.0283
17.15
0.001
Highly Signi ican
PC1(Bi h a e, wo king age popula ion, young
dependency)
0.0045
0.0244
0.18
0.085
Signi ican
PC2(Elde ly dependency, Popula ion g ow h a e)
0.0275
0.0265
1.04
0.302
No Signi ican
PC3(GFCF and emaining)
-0.0018
0.0279
-0.07
0.948
No Signi ican
Sou ce: Au ho ’s Calcula ion
While PCA success ully educes mul icollinea i y, he eg ession
esul s indica e ha none o he p incipal componen s a e
s a is ically signi ican . This sugges s ha he combined e ec s
o demog aphic ac o s equi e u he explo a ion, o he
a iance cap u ed by hese componen s does no s ongly
co ela e wi h GDP g ow h. The Ridge Reg ession esul s
p o ide s abilised coe icien s o indi idual a iables, e aining
hei in e p e abili y while mi iga ing mul icollinea i y. PCA, on
he o he hand, educes dimensionali y and highligh s he
agg ega e e ec s o demog aphic ac o s, bu i s eg ession
esul s e eal limi ed di ec associa ions wi h GDP. These
me hods se e as complemen a y analyses o he p ima y model,
o e ing obus ness checks and addi ional pe spec i es on he
demog aphic-economic ela ionship.
5.3 Un ans o med Model using aw da a
The un ans o med model explains 48.9% o he a ia ion in
GDP (R-squa e=0.489) and is s a is ically signi ican o e all (F-
s a is ic p<0.0001). Key indings include a signi ican nega i e
ela ionship be ween GDP and bo h he wo king-age popula ion
(p<0.001) and he young dependency a io (p<0.001), sugges ing
ine iciencies in labou u ilisa ion and he economic bu den o
you h dependency. The elde ly dependency a io shows a
ma ginally signi ican nega i e impac (p=0.078), highligh ing
challenges om an ageing popula ion.
Table 6: Pooled OLS Es ima es wi h Un ans o med Va iable
Va iable
Coe icien
S d. E o
-S a is ics
p-Value
Signi icance
Cons an
28.0123
6.37
4.40
0.000
Highly Signi ican
GFCF
-9.74
9.69
-1.01
0.317
No Signi ican
Bi h Ra e
11.03
9.62
1.15
0.254
No Signi ican
Young Dependency
-13.68
2.93
-4.67
0.000
Highly Signi ican
Wo king Age Popula ion
-31.75
7.55
-4.21
0.076
Signi ican
Elde ly Dependency
-5.3166
2.98
-1.76
0.003
Highly Signi ican
Popula ion g ow h a e
-6.123
11.50
-0.53
0.596
No signi ican
Sou ce: Au ho ’s Calcula ion
Va iables like GFCF, bi h a e, and popula ion g ow h a e a e
no signi ican , indica ing minimal di ec e ec s on GDP. While
he model p o ides use ul insigh s, unexpec ed nega i e
coe icien s and insigni ican a iables sugges po en ial issues
such as mul icollinea i y, limi ing i s eliabili y compa ed o
ans o med models. The esul s e eal ha demog aphic ac o s
signi ican ly in luence GDP, wi h heo e ical unde pinnings
aligning closely. The posi i e impac o bi h a es e lec s
popula ion eplenishmen 's ole in sus aining economic g ow h,
consis en wi h demog aphic ansi ion heo y. Con e sely, he
nega i e e ec s o young and elde ly dependency a ios align
wi h he economic bu den o dependen s, as highligh ed in
dependency a io li e a u e. The ma ginal signi icance o GFCF
sugges s ha in es men s in in as uc u e, while impo an , may
no di ec ly ansla e o GDP g ow h wi hou suppo i e policy
amewo ks. These indings unde sco e he need o a ge ed
in e en ions in educa ion, skill de elopmen , and wo k o ce
p oduc i i y o maximise demog aphic di idends and mi iga e
dependency challenges.
6. Recommenda ions
To ully ha ness he po en ial o demog aphic ansi ions,
policymake s in India and China mus implemen a ge ed
s a egies. India should ocus on maximising i s demog aphic
di idend by in es ing in educa ion, heal hca e, and skill
de elopmen o enhance wo k o ce p oduc i i y and educe
egional dispa i ies. Addi ionally, c ea ing mo e employmen
oppo uni ies, pa icula ly in high-g ow h sec o s, is essen ial o
abso b i s g owing wo king-age popula ion. Fo China,
add essing he challenges o an aging popula ion is c i ical,
equi ing policies ha p omo e elde pa icipa ion in he
wo k o ce and s eng hen social secu i y sys ems. Bo h coun ies
should p io i ize in es men s in in as uc u e and inno a ion o
suppo long- e m economic esilience. Fu he mo e, os e ing
inclusi e g ow h h ough gende equi y in educa ion and labo
o ce pa icipa ion will ampli y he bene i s o demog aphic
shi s. By aligning hese s a egies wi h sus ainable economic
policies, bo h na ions can na iga e hei demog aphic ansi ions
e ec i ely and main ain obus g ow h ajec o ies.
In . J . o Con emp. Res. in Mul i. Volume 4 Issue 1 [Jan- Feb] Yea 2025
256
© 2025 B. Vijay Raj, D . K. Su esh. This is an open-access a icle dis ibu ed unde he e ms o he C ea i e Commons A ibu ion 4.0 In e na ional
License (CC BY NC ND). h ps://c ea i ecommons.o g/licenses/by/4.0/
7. CONCLUSION
This s udy unde sco es he cen al ole o demog aphic dynamics
in shaping long- e m economic g ow h in India and China. By
examining key indica o s such as bi h a es, age dependency
a ios, wo king-age popula ion sha es, and he ising p opo ion
o elde ly ci izens, he analysis demons a es ha popula ion
s uc u e is a powe ul de e minan o mac oeconomic
pe o mance. A la ge wo king-age popula ion, when e ec i ely
educa ed and p oduc i ely employed, can signi ican ly accele a e
GDP g ow h h ough inc eased labo supply, highe p oduc i i y,
and expanded consump ion. India, which is s ill in he mids o
i s demog aphic ansi ion, con inues o bene i om a sizeable
you h popula ion and a g owing labo o ce. Howe e , ealizing
his demog aphic di idend equi es s a egic in es men s in
quali y educa ion, skill de elopmen , echnological eadiness,
and employmen gene a ion. Wi hou hese, he demog aphic
ad an age could con e in o a “demog aphic bu den.”
In con as , China has al eady mo ed beyond he peak o i s
demog aphic di idend due o i s his o ically low e ili y a es
and p olonged one-child policy. The esul ing apid ise in he
elde ly popula ion poses challenges such as a sh inking labou
supply, ising heal hca e cos s, pension p essu es, and slowing
economic momen um. China’s expe ience illus a es he long-
e m economic consequences o accele a ed popula ion ageing
and highligh s he impo ance o balancing popula ion con ol
policies wi h economic sus ainabili y. The compa a i e indings
e eal ha bo h na ions mus design policies aligned wi h hei
unique demog aphic ajec o ies. India needs o ocus on
maximising labou p oduc i i y, imp o ing human capi al,
expanding job oppo uni ies, and s eng hening heal hca e
in as uc u e. China, on he o he hand, mus add ess he
cons ain s o an ageing socie y h ough echnological
inno a ion, labou -sa ing au oma ion, pension e o ms, and
policies encou aging heal hy ageing. O e all, his s udy
concludes ha demog aphic ends a e no me ely s a is ical
occu ences bu s a egic de e minan s o na ional
compe i i eness. Policymake s in bo h coun ies mus in eg a e
demog aphic insigh s in o long- e m de elopmen planning o
ensu e sus ainable, esilien , and inclusi e economic g ow h.
REFERENCES
1. Aiya S, Mody A. The demog aphic di idend: e idence om
he Indian s a es. IMF Wo king Pape No. 11/38.
Washing on (DC): In e na ional Mone a y Fund; 2011.
2. Beck N, Ka z JN. Wha o do (and no o do) wi h ime-se ies
c oss-sec ion da a. Am Poli Sci Re . 1995;89(3):634–47.
3. Bloom DE, Canning D, Se illa J. The demog aphic
di idend: a new pe spec i e on he economic consequences
o popula ion change. San a Monica (CA): Rand
Co po a ion; 2003.
4. Bloom DE, Williamson JG. Demog aphic ansi ions and
economic mi acles in eme ging Asia. Wo ld Bank Econ Re .
1998;12(3):419–55.
5. Cai F. Demog aphic ansi ion, demog aphic di idend, and
Lewis u ning poin in China. China Econ J. 2010;3(2):107–
19.
6. Cai F, Lu Y. Popula ion change and esul ing slowdown in
po en ial GDP g ow h in China. China Wo ld Econ.
2013;21(2):1–14.
7. James KS. Glo i ying Mal hus: cu en deba e on
‘demog aphic di idend’ in India. Econ Poli Wkly.
2008;43(25):63–9.
8. Lee R, Mason A. Some mac oeconomic aspec s o global
popula ion aging. Demog aphy. 2010;47(1 Suppl):S151–
S172.
9. Mason A. Popula ion change and economic de elopmen in
Eas Asia: challenges me , oppo uni ies seized. S an o d
(CA): S an o d Uni e si y P ess; 2001.
10. Mundlak Y. On he pooling o ime se ies and c oss-sec ion
da a. Econome ica. 1978;46(1):69–85.
11. Williamson JG. Demog aphic change, economic g ow h,
and inequali y. In: Popula ion ma e s: demog aphic change,
economic g ow h, and po e y in he de eloping wo ld.
Ox o d (UK): Ox o d Uni e si y P ess; 2001. p. 106–21.
12. Woold idge JM. Econome ic analysis o c oss sec ion and
panel da a. 2nd ed. Camb idge (MA): MIT P ess; 2010.
13. Wo ld Bank. Wo ld de elopmen indica o s (WDI).
Washing on (DC): Wo ld Bank Publica ions; 2023.
14. Bloom DE, Canning D, Malaney P. Demog aphic change
and economic g ow h in Asia. Popul De Re . 2000;26:257–
90.
15. Kelley AC, Schmid RM. Agg ega e popula ion and
economic g ow h co ela ions: he ole o he componen s o
demog aphic change. Demog aphy. 1995;32(4):543–55.
16. Kelley AC, Schmid RM. Economic and demog aphic
change: a syn hesis o models, indings, and pe spec i es.
Popul (Engl Ed). 2007;62(1):1–30.
17. Mason A, Lee R. T ans e s, capi al, and consump ion o e
he demog aphic ansi ion. In: Popula ion ageing and he
gene a ional economy. Chel enham (UK): Edwa d Elga ;
2007.
18. Chau asia AR. India's demog aphic ansi ion and economic
de elopmen . J Popul Res. 2021;38(2):105–24.
19. Dyson T. Popula ion and de elopmen : he demog aphic
ansi ion. Ox o d (UK): Ox o d Uni e si y P ess; 2010.
20. Uni ed Na ions Depa men o Economic and Social A ai s
(UNDESA). Wo ld popula ion p ospec s. New Yo k (NY):
Uni ed Na ions; 2022.
21. Golley J, Tye s R. Demog aphic di idends, dependencies,
and economic g ow h in China and India. Asian Econ Pap.
2012;11(3):1–26.
22. Zhang J, Zhang Z. The e ec o li e expec ancy on economic
g ow h. J De Econ. 2005;77(2):533–66.
23. Wang F. The u u e o a di ided China: he demog aphic
challenge o economic p ospe i y. Popul De Re .
2011;37(3):552–61.
24. Li H, Zhang J, Zhang J. E ec s o longe i y and popula ion
aging on economic g ow h. J Comp Econ. 2009;37:491–506.
25. Ba o RJ. De e minan s o economic g ow h: a c oss-
coun y empi ical s udy. Camb idge (MA): MIT P ess;
1997.
In . J . o Con emp. Res. in Mul i. Volume 4 Issue 1 [Jan- Feb] Yea 2025
257
© 2025 B. Vijay Raj, D . K. Su esh. This is an open-access a icle dis ibu ed unde he e ms o he C ea i e Commons A ibu ion 4.0 In e na ional
License (CC BY NC ND). h ps://c ea i ecommons.o g/licenses/by/4.0/
26. Ba o RJ, Sala-i-Ma in X. Economic g ow h. 2nd ed.
Camb idge (MA): MIT P ess; 2004.
27. Bane jee A, Du lo E. G ow h heo y h ough he lens o
de elopmen economics. In: Handbook o economic g ow h.
Ams e dam: Else ie ; 2005. p. 473–552.
28. Abdullah A, e al. Demog aphic dynamics and economic
g ow h: e idence om de eloping coun ies. Asian De
Re . 2019;36(1):98–123.
29. P skawe z A, Lindh T. Demog aphic change and economic
g ow h. Vienna Yea b Popul Res. 2007; p. 19–45.
30. Uni ed Na ions Popula ion Fund (UNFPA). The
demog aphic di idend: oppo uni ies and challenges o
de eloping economies. New Yo k (NY): UNFPA; 2021.
C ea i e Commons (CC) License
This a icle is an open-access a icle dis ibu ed unde he
e ms and condi ions o he C ea i e Commons A ibu ion
(CC BY 4.0) license. This license pe mi s un es ic ed use,
dis ibu ion, and ep oduc ion in any medium, p o ided he
o iginal au ho and sou ce a e c edi ed.
