Population Growth and Economic Development in Ethiopia

Abstract

The debate on the relationship between population growth and economic growth has been undergoing over a long period of time and yet it is inconceivable developing countries in generally and Ethiopia particularly. Hence, this study aimed to analyze the impact of population growth on economic development of Ethiopia using time series data from 1974/75 to 2015/16 by employing Johansen co-integration test, Granger causality test, VAR and VECM. The study found that population growth had a significant negative impact both in the short run and in the long run on economic development. While government education expenditure as percentage ofRGDP is positive and statistically significant relationship with economic development. The results of causality test shows that there exists unidirectional relationship running from economic development to population growth in long run. Lastly the study recommends that the government as well as the concerned body should exert their effort to balance the population growth and economic development