Population Aging And Iran's Non-Oil Economic Growth

The recently emerged symptoms of population aging have raised serious concerns in some developed countries. A recent report by the United Nations (UN) indicates that aging is more rapidly growing and is even more serious in developing countries than it is in certain other countries. Therefore, this study is aimed to determine the impression of aging on non-oil economic growth. A simple economic growth model was built which would take demographic variables into account. Then, using the country's data for the years 1967-2011, the researchers tried to estimate autoregressive distributed lags (ADL). The short- and long-term models, and error correction model were estimated using Microfit 4.0 software. The findings show that physical capital, human capital and trade openness have a significant positive effect on per capita income, both in the long and in the short run. Similarly, the regression analysis indicates that “Ageing Index” may have a significant effect on economic growth in Iran’s non-oil sector. Due to the young makeup of Iran's population, the signs of aging economy have not raised sensitiveness; but predictions indicate that the aging process in Iran will be intensified in the coming decades and its negative effects will emerge in near future. Therefore, due to the long-term effects of aging on economic growth, working structure and retiredness reform policies, it is vital to stabilize population growth at an optimal rate, and more importantly, pay attention to capital storage.