PENDUDUK DAN PERTUMBUHAN EKONOMI: Sebuah Penjelasan Empiris Baru

Abstract

The relationship between population and economic growth is widely debated among economists. In general, population is believed to have positive, negative or insignificant impact on economic growth. The study attempted to analysis the impact of population to output Indonesia. A theoretical framework developed by Becker et al. (1999) was utilized. According to Becker et al. (1999), population density is positively related to economic growth. Higher population density will increase competition in the labor market. This competition promotes accumulation of human capital, which in turn, will stimulate economic growth. The study exploited a panel data of provinces in Indonesia during the period of 2004 to 2013. The analysis utilized a Simultaneous Panel Data Method, i.e. Within 2SLS (Fixed Effect Method) and the estimation was conducted using instrumental variables (IV/2SLS). The empirical model included population variable (measured by population density and labor) and output variable (measured by provincial gross domestic product). The result showed that population density has a negative impact on human capital whilst human capital has a positive impact on economic growth. This study concluded that higher population is good for the economy when the people have adequate human capital. This suggests that higher population density will enhance output as long as it stimulates higher human capital accumulation.