An empirical study on the nexus of poverty, GDP growth, dependency ratio and employment in developing countries

Abstract

The paper has scrutinized the nexus among poverty, economic growth, employment and dependency ratio in developing countries. The primary intension behind this study is to find out the association between variables such as poverty, economic growth, agricultural and industrial employment and dependency ratio due to the gap in the existing literature. This study fully relies on cross country data and involves forty one countries which have been selected from Asia, Latin America and Sub-Saharan Africa. For this study, OLS method, correlation and econometric tools have been employed. Two models employed in the analysis are goodness of fit because both p-value and F-statistics in the models are less than 5%. The results bring to light the fact that age dependency ratio has had a tremendous impact on poverty and poverty has had a relatively very high impact on the age dependency ratio. Even though Industrial employment has a negative association with poverty incidence, it does not have a significant impact on poverty. The finding that economic growth, poverty and industrial employment significantly affect the age dependency ratio in model two is practicable and consistent with economic theories. Thus stable economic growth with an increase in labour productivity and labour intensive technology is an active remedy for solving this problem.