Natural resources and population growth; what is the relationship? evidence from oil-based economy

Abstract EN

Writings on natural resources and population growth had started since Malthus had published his pioneered idea on population-natural resources connection.

Recent years the relationship became rare.

This paper aims to investigate the potential effect of natural resources on population changes once again in one of the highest dependence economies on oil.

It lays a question whether natural resources (oil wealth) and its fluctuations have impacts on population growth.

Employing vector error correction model VECM utilizing data covered 56 years on variables of interest.

Findings reveal that variables related to natural resources showed a strong causal relationship with population changes: however, government spending is likely the most influential, seeming to be the main channel for natural resource impacts on population changes in both the long and short run.

More specifically, current government spending (i.e.

government consumption) has a significant positive effect on both periods, while development expenditure shows a significant negative in the long-run and positive and weak effect in the short term.

These results are consistent with theoretical fundamentals since development spending is expected to lower population growth.

The interesting finding is that the strong influence of natural resource abundance on population growth because through governmentsocial expenditure is strong.

This effect is high to the point that fluctuations in the global oil market can be observed in the variations of population growth rates.