A time-varying impact of ageing population on the economy of Malaysia

Abstract

Purpose By 2040, 14.5% of Malaysia’s population will consist of those aged 65 years and above. The purpose of this paper is to examine the time-varying impact of an ageing population on the economy of Malaysia.Design/methodology/approach The relationship between the ageing population and economic performance was examined from the period 1971–2019. The time-varying rolling convergence estimation of 40 + k observations sample frame of the trace statistics was analysed.Findings The ageing population had affected the economic activities in Malaysia over all sampling time frame from 1971 to 2010, 1972–2011, …to 1980–2019. The growth in total population and economic activities also caused a significant increase in the ageing population in the long run. An improved economic performance signifies the affordability for better healthcare services and improvement in medical science technology to treat diseases.Originality/value Its ageing population has gradually slow down economic activities in Malaysia. Now is the time to be prepared and address an ageing workforce issues such as productivity, retirement policy, savings behaviour and life-long learning capabilities.Peer review The peer review history for this article is available at https://publons.com/publon/10.1108/IJSE-04-2021-0234.