The Relationship Between Population Aging And Economic Growth In East Java

Abstract

This study examines the relationship between population aging and economic growth in East Java Province during 2020–2024, with educational attainment as a moderating variable. Population aging represents a demographic transition that may be associated with changes in economic performance through labor productivity, dependency burden, and human capital capacity. This study uses a quantitative approach with balanced panel data from 38 regencies and municipalities in East Java, comprising 190 observations. The data were obtained from official sources, including Statistics Indonesia (BPS), the World Bank, OECD, and the Ministry of Education, Culture, Research, and Technology. Population aging is measured by the old-age dependency ratio, economic growth by the real GRDP growth rate, and educational attainment by mean years of schooling among the population aged 15–64 years. The data were analyzed using panel regression with a Moderated Regression Analysis (MRA) approach estimated through the Panel EGLS Random Effects Model. The results show that population aging has a negative coefficient of −0.361656 but is not statistically significant (p = 0.1121), indicating insufficient evidence of a direct relationship with economic growth. The interaction between population aging and educational attainment has a positive coefficient of 0.053348 (p = 0.0656), significant at the 10% level but not the 5% level. This indicates that educational attainment may moderate the relationship between population aging and economic growth, although the evidence is weaker than conventional significance. The study highlights education as an important factor in strengthening human capital and addressing demographic transition challenges