The effect of demographic bonus on economic growth in Vietnam and 5 selected countries

Abstract

Demographic change influences to both economic and society at different aspects, especially in the demographic bonus period. These changes are not simple in creating the shift in total population, the age structure but also establishing the new working age cohort. Therefore, the role of demographic in economic growth and social stability could not be denied. The purpose of this thesis is to access the effects of demographic bonus to economic growth and to investigate the gap between countries at different demographic bonus stage. The subjects used in this paper include Vietnam and five collective countries in East and Southeast Asia. This thesis identifies the factors of demographic bonus that affect to economic growth using panel data of 6 East and Southeast Asian countries in the period 1995-2010 through fixed effect and panel least squared method. The demographic bonus dummy variable is also taken into account in this paper in order to examine the gulf between countries have experience in this period and countries have not yet confronted with this unique stage of demographic history. It is found that young dependency ratio and labor participants rate have a strong impact on economic growth. In addition, all three channels that demographic bonus creates benefit have influence to the economic growth, especially the channel of human capital. Dummy variable is also explored that have a significant meaning in the regression model. This proves that there is a difference in income between countries at distinguishes stage of demographic bonus.