Open AccessDependency Rate and Savings: The African Evidence with Panel Data
Author(s) -
Nicholas Apergis,
Christina Christou
Publication year - 2012
Publication title -
international journal of business and management
Language(s) - English
Resource type - Journals
eISSN - 1833-8119
pISSN - 1833-3850
DOI - 10.5539/ijbm.v7n4p84
Subject(s) - cointegration , panel data , dependency ratio , causality (physics) , dependency (uml) , economics , econometrics , path dependency , panel analysis , empirical evidence , demographic economics , population , demography , computer science , economic geography , quantum mechanics , software engineering , sociology , philosophy , physics , epistemology
This study examines the impact of the age dependency ratio on domestic savings rates. We test this issue for 16 African countries using annual panel data. The empirical analysis was conducted using the panel unit roots, panel cointegration and panel causality tests. The empirical findings indicate evidence of panel cointegration. Furthermore, results from panel causality analysis reveal that dependency ratio causes savings rate negatively. Overall, our findings support the view that changes in non-working population size are important in explaining the future path of domestic savings rates in Africa.