Does Demographic Transition Reduce Poverty in Central Asia?

Abstract

Central Asian countries are experiencing a demographic transition due to the shrinking fertility and the mortality rates, and are in the stage of getting benefits from the economic tailwinds with an increased working-age population share. This potential is expected to convert the demographic transition into economic growth as well as poverty reduction. Although all countries' economy grows, poverty reduction is stagnated. The main question here is about the underlying cause of this stagnation in economic poverty reduction, is it due to an increase in the working-age population, or whether the region utilizes these economic benefits through accumulating human resources.
 In this paper, it was found out that one of the main reasons for continuing poverty is the lack of job creation. Moreover, due to the existing insecure jobs, the increasing economically active population of Central Asia is forced to seek jobs abroad. This paper analyzes the main channels that impact the demographic change in the Central Asian countries considering human capital, socio-economic situation, and poverty rate by using cross-section data for the period of 2000 – 2019 via the fixed effects method. According to the results of the model, the recommendation for reducing economic poverty is a well planned demographic policy that should focus on strengthening human resources, especially on education for developing new skills in an early stage which should boost economic growth.