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Demographic transition and political stability: Does corruption matter?

Mohammad Reza Farzanegan and Stefan Witthuhn
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Stefan Witthuhn: CESifo Munich

MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: A demographic transition resulting from an increase in the size of the young working age population can be a blessing or a curse for economic performance. We focus on the political stability effects of a larger youth population and hypothesize that corruption matters in this nexus. Using panel data covering the period of 2002–2012 for more than 150 countries, we find a negative interaction effect between the relative size of the youth population (17-25 years old) within the total working age population (15-64 years old) and corruption on political stability. This finding is robust, controlling for country and time fixed effects and a set of control variables that may affect stability. The negative interaction term between corruption and the youth population remains robust when we control for the persistency of political stability and the possible endogeneity of the main variables of interest through dynamic panel data estimations. Our findings shed more light on the political turmoil in the Arab world, with the so-called Arab Spring.

Keywords: demographic transition; youth population; political stability; corruption (search for similar items in EconPapers)
JEL-codes: D73 D74 E02 H56 J11 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2014
New Economics Papers: this item is included in nep-gro and nep-pol
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Working Paper: Demographic Transition and Political Stability: Does Corruption Matter? (2014) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:201459

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