Abstract:
Demographic changes provide the best understanding to the policy makers to set their
priorities for future planning of the country. During the past six decades, Sri Lanka has
undergone significant demographic changes, and it has been experiencing a contracting
population for the last four decades and the total fertility rate has been declining. Objective
of this study is to examine the impact of demographic transition variables on economic
growth in Sri Lanka for the period 1990-2009. For this purpose, gross domestic product at
current market prices was taken as dependent variable and demographic variables such as
infant mortality rate, total fertility rate, labour force participation and midyear population
size were considered as independent variables. Secondary data were collected from
economic reviews and annual reports of Central Bank of Sri Lanka. Statistical techniques
such s growth models and log-log models were applied. Results of the growth models
suggest that gross domestic product at current market prices grew at the rate of 13.9%, infant
mortality rate has declined by 4%, fertility rate has decreased by 1.3% and population
growth has increased by 0.9% for the study period. Results of the log-log model implies that
total fertility and population growth rates have positive contribution to the gross domestic
product while labour force participation and infant mortality rates have negatively
contributed to it and they are significant at 5% level except labour force participation. It is
concluded that demographic transition can have significant effect on economic growth of
Sri Lanka. Declining in fertility and infant mortality rates, changing of age structure, an
increasing life expectancy, changes of women status and all these factors have more
powerful to force the demographic transition in Sri Lanka.
