Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/317479 
Year of Publication: 
2021
Citation: 
[Journal:] Journal of Business Economics and Management (JBEM) [ISSN:] 2029-4433 [Volume:] 22 [Issue:] 2 [Year:] 2021 [Pages:] 410-423
Publisher: 
Vilnius Gediminas Technical University, Vilnius
Abstract: 
A rise in the ageing population is the current demographic challenge which is capable of pressuring the government to borrow more external funds in order to support domestic needs. This study aims to investigate the effects of the external debt of 36 upper-middle-income economies from 2000 to 2017 due to the increase in the ageing population. This study employed the system Generalised Method of Moments (GMM), where it revealed that the ageing population could increase the level of external debt if the population aged 65 and above was used as a proxy to represent the ageing population. However, the results were insignificant when the proxy was changed to the old-age dependency ratio. It illustrated that the increase in external debt occurs due to the increase in the population aged 65 and above because the government has to allocate more funds for healthcare, age-friendly infrastructure, social security and pensions. However, the dependency of the older people on government is minimal because of their long-term savings. Hence, the old-age dependency ratio has an insignificant relationship with the external debt level. For future research, it is suggested that the impact of the ageing population can be investigated on the domestic debt level.
Subjects: 
ageing population
external debt
GMM
upper-middle-income economies
old-age dependency
population ages 65 and above
healthcare
pensions
social security
JEL: 
E62
H63
J14
Persistent Identifier of the first edition: 
Creative Commons License: 
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Document Type: 
Article

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