The Effects of Ageing Population Growth Rate on GDP in Kenya

Population has been thought to influence economic growth but economist differs on the linkage, and demographic components influencing economic growth. Proponents of demographic transition theory argue that population structure plays a crucial role in influencing economic growth of a country. This study aimed at examining the effects of ageing population on economic growth in Kenya, Using Time-series data for the period 1963 - 2013, this research sheds light by examining the co-integration relationship between GDP growth rates and ageing population growth rates. The findings showed that every unit increase in aging population, reduces GDP by 0.719%. Therefore, to match population and economic parameters sustainably it is recommended that public spending in sectors offering services needed by the ageing population is increased so as to reduce the negative impact it has on economic growth.