The Effect of Compressed Demographic Transition and Demographic Gift on Economic Growth

In this paper, we examine the demographic transition and its effect on economic growth using a cross-country data. We use a threshold regression model to verify the transition and to confirm whether the demographic transitions are compressed or not in developing countries. We found out that in general, the demographic transitions, including the decreasing birth and death rate, in developing countries start in an earlier development stage compared to the demographic transitions in developed countries. These results suggest that the aging population and the decreasing working-age fraction in developing countries can also start in an earlier development stage than the experiences of developed countries and that the demographic gift in developing countries can also be lost in an early stage.