Population and Economic Growth Nexus: Evidence from Indonesia

Abstract

The priority of this paper is to examine the relationship to and impact of population on economic growth and selected variables in Indonesia. This paper uses time-series data of total population, purchasing power parity, Gross Domestic Product (GDP) and unemployment rate in Indonesia for the period 1987-2020. The data are retrieved from the World Bank World Development Indicator, St. Louisfed and Trading Economics. The method applied to analyze the data is Ordinary Least Square (OLS) with the support of EViews software. The finding shows that the population has a significant impact on the purchasing power parity, unemployment and GDP which means that the population indirectly impacts the economic growth in Indonesia. Both economic and demographic factors used in this paper are important in explaining the total population and economic growth in Indonesia and hence in view of policy implications. The implications may also allow the policymakers to come up with a new policy that helps to control the population growth in order to boost the economic growth in Indonesia.