Age-Structure and Economic Growth: Analysing Third Demographic Dividend in Europe and Central Asian Region

The region under study is worth exploring as the long-run socio-economic development and demographic changes are significant to probe into to get insights about fundamental sources of growth trajectory for a longer period. Using POLS and GMM estimations for 34 countries of Central Asia and Europe as a region from 1990-91 to 2019-20 based on data collected from the World Bank and Penn World Table, the study finds that a decreasing young dependency ratio in Central Asian countries can improve job market inclusion, potentially increasing economic production while European nations’ increasing old-age dependency ratio exerts pressure on welfare programs and employment opportunities, often hindering growth. Additionally, nations with healthy dependency ratios, where the workingage population is sufficiently utilised, generally experience stronger economic growth historically. The study regards the Action Programmes as an essential roadmap for policy approaches that capitalise on the potential of individuals and strengthen societies amid new demographic realities since demographic proportions substantially affect economic development in this region, shaping labour markets, consumer trends, and investment approaches