An Empirical Investigation on How Population Aging Affects Economic Development: A Panel Data Analysis of 16 Prefecture-Level Cities in Anhui, China

In recent years, studies that examine the relationship between economic development and population change have drawn more attention from the academic community. The intrinsic links between changes in age structure and economic development rates at the macro-national level as well as specific regional aspects have been the subject of extensive theoretical analysis and empirical investigations by numerous academics. Using panel data from 16 prefecture-level cities in Anhui Province between 2010 and 2023, this study investigates the impact of population aging on economic growth and its underlying mechanisms. This is obtained by using benchmark regression, the instrumental variable method (2SLS), mediation effect testing, and regional heterogeneity analysis. The study’s main conclusions are as follows: (1) Anhui Province’s population aging has a negative impact on economic growth; (2) the income gap between urban and rural areas is a significant mediating factor in the relationship between population aging and economic growth; and (3) there is significant regional variation among the 16 prefectural-level cities in Anhui Province. To lessen the negative effects of population aging on economic growth, Anhui Province must implement coordinated and integrated efforts to improve the social security system, accelerate industrial development, and lessen the gap between urban and rural areas.