The Impact Of Population Growth On Economic Growth In Kenya

Determining the effect of population growth on economic growth has become crucial to the policy makers in developing countries and Kenya in particular.There are three different schools of thoughts among economists.The first one talks about population growth as a component that hinders economic growth.The second one says that population growth triggers economic growth.While the third one says that population growth is a neutral factor to economic growth.Therefore,this research analyses the empirical relationship between population growth and economic growth in Kenya using time series data from 1980-2015.The study aims to explore long-run relationship between population growth and economic growth and also the direction of causality between them.The study uses GDP as a proxy of economic growth as dependent variable,and independent variables include population growth,gross capital formation,savings and household consumption.The study uses the Engle-Granger Test and Error Correction Model to examine the long and short run relationship.Granger–causality test is also employed to determine the direction of causality between population growth and economic growth.During the study period,it has been found that the relationship between population growth and economic growth is positive and there exist a unidirectional relation running from population growth to economic growth.The study further reveals that population growth,gross capital formation,household consumption and savings have a positive impact on the GDP.The policy recommendations of the results of the research suggest that the government needs to take population as virtue by investing more in human capital development through quality education,infrastructure,as well as health investment to achieve economic growth.