Table 12.
Effects of old-age populations and GDP per capita in affecting the allocation of compositional government spending (as percentage of GDP) using dynamic system GMM (with old-age dependency ratio as a proxy for old-age populations).
| Variable | (Public Admin) | (Defense) | (Order) | (Economic) | (Environ ment) | (Housing) | (Culture) | (Health) | (Education) | (Social Protection) |
|---|---|---|---|---|---|---|---|---|---|---|
| L4.GDP per capita | −2.131*** | −2.724*** | −2.569*** | −2.536*** | −2.898*** | −2.694*** | −2.318*** | −2.600*** | −2.233*** | −2.480 |
| (0.000) | (0.000) | (0.000) | (0.000) | (0.000) | (0.000) | (0.000) | (0.000) | (0.000) | (0.000) | |
| Trade to GDP | 0.0273 | 0.217 | 0.324 | 0.299 | 0.575+ | 0.386 | 0.283 | 0.215 | 0.496 | 0.131 |
| (0.942) | (0.553) | (0.390) | (0.468) | (0.073) | (0.319) | (0.491) | (0.556) | (0.181) | (0.740) | |
| Control of corruption | 1.670*** | 2.080*** | 2.070*** | 1.957*** | 2.487*** | 2.036*** | 2.382*** | 2.038*** | 1.942*** | 1.842*** |
| (0.000) | (0.000) | (0.000) | (0.000) | (0.000) | (0.000) | (0.000) | (0.000) | (0.000) | (0.000) | |
| Financial Openness | 0.316 | 0.183 | −0.136 | −0.344 | −0.395 | −0.310 | −0.139 | −0.160 | −0.0645 | −0.326 |
| (0.525) | (0.708) | (0.764) | (0.477) | (0.410) | (0.534) | (0.789) | (0.743) | (0.875) | (0.497) | |
| Democracy_dummy | −1.279* | −1.105* | −0.802+ | −1.025* | −0.828* | −0.858+ | −1.414** | −1.027* | −1.039* | −0.903* |
| (0.012) | (0.020) | (0.084) | (0.019) | (0.028) | (0.067) | (0.007) | (0.037) | (0.021) | (0.047) | |
| L4. Expenditure to GDP | 0.0278 | 0.0785 | −0.226** | −0.0233 | −0.230** | −0.145 | −0.138* | 0.0345 | −0.179* | −0.0190 |
| (0.310) | (0.281) | (0.007) | (0.539) | (0.006) | (0.115) | (0.018) | (0.685) | (0.012) | (0.579) | |
| L4. Old_depend, ln | 0.781 | −0.316 | −0.517 | −0.325 | −1.103 | −0.496 | −0.0655 | −0.0262 | 0.00619 | −0.0711 |
| (0.205) | (0.612) | (0.296) | (0.589) | (0.102) | (0.418) | (0.910) | (0.966) | (0.991) | (0.909) | |
| L4.exp_pub_ gdp | −0.328** | −0.114 | −0.316** | −0.247* | −0.191 | −0.0810 | −0.310* | −0.0747 | −0.255* | |
| (0.006) | (0.309) | (0.008) | (0.014) | (0.131) | (0.306) | (0.026) | (0.463) | (0.011) | ||
| L4.exp_def_gdp | −0.256 | 0.326 | 0.0519 | 0.205 | 0.218 | 0.174 | −0.0880 | −0.0641 | 0.0200 | |
| (0.401) | (0.321) | (0.857) | (0.431) | (0.552) | (0.319) | (0.794) | (0.829) | (0.941) | ||
| L4.exp_order_gdp | 0.164 | 0.0483 | −0.00798 | 1.266* | 0.187 | 0.193 | 0.0965 | −0.234 | −0.0266 | |
| (0.725) | (0.918) | (0.986) | (0.018) | (0.686) | (0.710) | (0.841) | (0.576) | (0.954) | ||
| L.exp_econ_gdp | 0.0382 | −0.0264 | 0.343+ | 0.275 | 0.197 | 0.504** | 0.0984 | 0.177 | 0.133 | |
| (0.791) | (0.883) | (0.059) | (0.153) | (0.276) | (0.007) | (0.599) | (0.292) | (0.383) | ||
| L.exp_envi_gdp | 3.188* | 2.305+ | 2.003 | 2.070 | 2.455+ | 0.639 | 2.563* | 1.459 | 2.307+ | |
| (0.011) | (0.074) | (0.119) | (0.115) | (0.068) | (0.666) | (0.037) | (0.293) | (0.096) | ||
| L4.exp_housing_gdp | −0.229 | −0.120 | 0.189 | −0.200 | 0.445 | −0.496 | −0.342 | −0.228 | −0.168 | |
| (0.601) | (0.792) | (0.673) | (0.647) | (0.386) | (0.351) | (0.440) | (0.624) | (0.701) | ||
| L4.exp_health_gdp | −0.180 | −0.512 | 0.272 | 0.0777 | 0.115 | 0.0117 | 0.903 | −0.197 | 0.429 | |
| (0.731) | (0.380) | (0.607) | (0.891) | (0.828) | (0.982) | (0.187) | (0.717) | (0.301) | ||
| L4.exp_cult_gdp | 1.676*** | 2.537*** | 2.541*** | 2.566*** | 2.691*** | 2.878*** | 2.366*** | 2.038*** | 2.318*** | |
| (0.000) | (0.000) | (0.000) | (0.000) | (0.000) | (0.000) | (0.000) | (0.000) | (0.000) | ||
| L4.exp_edu_gdp | −1.009** | −1.553*** | −1.124** | −1.195** | −1.522*** | −1.377*** | −0.973** | −1.277** | −1.230** | |
| (0.004) | (0.000) | (0.002) | (0.002) | (0.000) | (0.001) | (0.004) | (0.002) | (0.001) | ||
| L4.exp_socpro_gdp | 0.116 | 0.132 | 0.306+ | 0.159 | 0.444** | 0.317+ | 0.230 | 0.0387 | 0.305+ | |
| (0.402) | (0.434) | (0.086) | (0.410) | (0.006) | (0.096) | (0.261) | (0.818) | (0.067) | ||
| L4. Old_depend, ln X L4.exp_def_gdp X L4.GDP per capita | 0.0157 | 0.00429 | 0.00660 | 0.0109 | 0.00420 | 0.00705 | 0.0105 | 0.0193+ | 0.00804 | |
| (0.206) | (0.734) | (0.580) | (0.333) | (0.770) | (0.418) | (0.422) | (0.089) | (0.489) | ||
| L4. Old_depend, ln X L4.exp_order_gdp X L4.GDP per capita | −0.0235 | −0.0119 | −0.0154 | −0.0494+ | −0.0168 | −0.0204 | −0.0204 | −0.00191 | −0.0131 | |
| (0.346) | (0.637) | (0.545) | (0.091) | (0.501) | (0.451) | (0.451) | (0.936) | (0.605) |
| Variable | (Public Admin) | (Defense) | (Order) | (Economic) | (Environ ment) | (Housing) | (Culture) | (Health) | (Education) | (Social Protection) |
|---|---|---|---|---|---|---|---|---|---|---|
| L4. Old_depend, ln X L.exp_econ_gdp X L4.GDP per capita | −0.00130 | −0.00110 | −0.00351 | 0.00155 | −0.00112 | −0.0139* | −0.00418 | −0.000393 | −0.00354 | |
| (0.794) | (0.834) | (0.471) | (0.795) | (0.821) | (0.016) | (0.446) | (0.938) | (0.497) | ||
| L4. Old_depend, ln X L.exp_envi_gdp X L4.GDP per capita | −0.0991* | −0.0766+ | −0.0516 | −0.0562 | −0.0693 | 0.000690 | −0.0685+ | −0.0304 | −0.0622 | |
| (0.019) | (0.097) | (0.235) | (0.209) | (0.130) | (0.989) | (0.093) | (0.514) | (0.187) | ||
| L4. Old_depend, ln X L4.exp_housing_gdp X L4.GDP per capita | 0.00374 | −0.00489 | −0.00121 | 0.00723 | −0.000111 | 0.0203 | 0.0101 | 0.0138 | 0.00576 | |
| (0.851) | (0.811) | (0.951) | (0.722) | (0.996) | (0.364) | (0.595) | (0.537) | (0.775) | ||
| L4. Old_depend, ln X L4.exp_health_gdp X L4.GDP per capita | 0.00907 | 0.0173 | 0.00146 | 0.00371 | 0.00838 | 0.00839 | −0.0209 | 0.0157 | −0.00844 | |
| (0.641) | (0.409) | (0.942) | (0.860) | (0.659) | (0.674) | (0.414) | (0.449) | (0.557) | ||
| L4. Old_depend, ln X L4.exp_cult_gdp X L4.GDP per capita | −0.0665*** | −0.112*** | −0.0900*** | −0.0964*** | −0.105*** | −0.106*** | −0.0945*** | −0.0579* | −0.0886*** | |
| (0.001) | (0.000) | (0.000) | (0.000) | (0.000) | (0.000) | (0.000) | (0.012) | (0.000) | ||
| L4. Old_depend, ln X L4.exp_edu_gdp X L4.GDP per capita | 0.0389** | 0.0648*** | 0.0524*** | 0.0497** | 0.0705*** | 0.0619*** | 0.0410** | 0.0504** | 0.0506** | |
| (0.009) | (0.000) | (0.000) | (0.001) | (0.000) | (0.000) | (0.003) | (0.001) | (0.001) | ||
| L4. Old_depend, ln X L4.exp_socpro_gdp X L4.GDP per capita | −0.00436 | −0.00740 | −0.00272 | −0.00509 | −0.00738 | −0.00577 | −0.00225 | −0.00179 | −0.00201 | |
| (0.398) | (0.210) | (0.611) | (0.412) | (0.194) | (0.331) | (0.749) | (0.659) | (0.731) | ||
| L4. Old_depend, ln X L4.exp_pub_ gdp X L4.GDP per capita | 0.0131** | 0.0159** | 0.0163** | 0.0230*** | 0.0160** | 0.0114* | 0.0141** | 0.0120* | 0.0137* | |
| (0.008) | (0.002) | (0.002) | (0.000) | (0.002) | (0.037) | (0.003) | (0.013) | (0.006) | ||
| N. Obs. | 785 | 803 | 785 | 785 | 963 | 791 | 790 | 785 | 785 | 785 |
| AR (1) p-value | 0.896 | 0.306 | 0.250 | 0.245 | 0.285 | 0.190 | 0.661 | 0.339 | 0.381 | 0.347 |
| AR (2) p-value | 0.111 | 0.172 | 0.481 | 0.189 | 0.488 | 0.270 | 0.962 | 0.168 | 0.243 | 0.205 |
| Hansen p-value | 0.0000977 | 0.0000989 | 0.0000474 | 0.000135 | 0.0000987 | 0.0000942 | 0.000341 | 0.000327 | 0.0000778 | 0.000199 |
Note: This table estimates the Effects of Old-Age Populations and Reallocation of Government Spending across various functions on economic growth (4 years) using two-step System GMM. For two-step System GMM, we put lagged Dependent Variable as Endogeneous with collapse option. The p-value of Auto-Correlation 1st and 2nd order, including Hansen's post-Estimation Tests are presented at the bottom Panel. The p-values are presented in parentheses and + p < 0.10, *p < 0.05, **p < 0.01, ***p < 0.001.
Source: Author's calculation.