Demographic Transition and Economic Growth in Nigeria: An Empirical Investigation

This study examines the impact of demographic transition on Nigeria’s economic growth from 1981 to 2021 using the ARDL model and Granger causality tests. It finds a strong long-run relationship between demographic structure and GDP per capita, confirmed by an F-statistic of 9.16, which exceeds the 1% significance critical bounds. Long-run results show that a 1% increase in the child population leads to a 23.76% rise in GDP per capita, while a 1% rise in the working-age population results in a 6.30% increase, both reinforcing the demographic dividend hypothesis. However, a 1% increase in the aged population causes a 0.1118% decline in GDP per capita. In the short run, only life expectancy significantly influences growth. Causality analysis reveals a bidirectional relationship between the aged population and economic growth, while child and working-age populations have unidirectional causal effects on growth. The study concludes that strategic investment in education, healthcare, and inclusive economic policies is essential to harness Nigeria’s demographic potential for sustainable growth.