Does the demographic dividend with human capital development yield an economic dividend? Evidence from Central Asia

ABSTRACT

Both fertility and mortality rates are declining in the five Central Asian countries, so far resulting in an increasingly working-age population. The main question is whether these countries can benefit from this demographic transition while having different economic structures and diverse ethnicities. Our article shows the importance of demographic, economic, and human capital indicators and the influential role of governance indicators such as the Political Corruption Index and Egalitarian Democracy Index for economic growth. Based on the data from 1991 to 2018, the analysis has been conducted by employing fixed effect estimation with Driscoll-Kraay standard errors. The findings indicate that human capital with proper education and an appropriately absorbed labour force does have a more powerful effect on the demographic benefit. In addition, improving the quality of governance has a significant impact on economic growth.

KEYWORDS:

• Demographic dividend
• Central Asia
• human capital
• governance indicators
• economic growth

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. https://www.theglobaleconomy.com/rankings/female_labor_force_participation/Asia/ Downloaded 25 July 2022.

2. The recent situation of massive anti-government protests in Kazakhstan in January 2022, started by spiking in fuel prices, and developed into serious political unrest after a long period of stability in the country. Some experts accuse protestors of being part of a foreign terrorist plot and assume ‘outside power‘ is behind the unrest (Human Rights Watch, 2021; Turak, 2022). These situations can illustrate that improvement in democracy is still needed in the country, even though the Egalitarian democracy index highlights relatively better results.