Study on the long-term and short-term effects of globalization and population aging on ecological footprint in OECD countries

Abstract

Population aging has become a global phenomenon. Whereas, the ecological consequences of population aging are rarely addressed in current research. In this context, this study contributes to the existing literature by providing new empirical evidence on how population aging along with globalization, economic growth, energy consumption, natural resource rent, and human capital affect ecological footprint for selected 27 Organization for Economic Cooperation and Development (OECD) countries during 1970–2017. This study utilizes an advanced econometric approach, Pooled Mean Group (PMG) estimator for empirical estimation, that allows heterogeneity in the slope parameters and dependencies across countries. The long-term results disclose that globalization (overall) decreases the ecological footprint. On the other hand, financial and political globalization poses a favorable impact on environmental quality, while economic and social globalization is found to increase environmental degradation. Population aging has a statistically significant negative effect on the ecological footprint, but its non-linear term increases the ecological footprint. Additionally, economic growth, energy consumption, and natural resource rent exacerbate environmental deterioration. In contrast, human capital decreases ecological footprint. Based on the empirical results, important policy implications have been provided.