Complementarity and conflict among population and other policies: specifying an economic-demographic model for a developing country.

The demographic and economic model illustrates the links between demographic and socioeconomic factors and government policy for developing countries. The operating model attempts to balance practical realities with manageability. The Philippines was used to show how the model operates. Demographic planners should be involved in the early development stages of policy development. The sociodemographic and economic framework by Orbeta has identified population outcomes affecting the economic system and the population system (fertility, mortality, and migration), both of which affect economic outcomes. The Economic system is comprised of consumption, investments, fiscal budgets, money supply, international trade and finance, labor use, and land use, which interact with private and public expenditures, employment, educational status, health status, housing, and environmental quality. A two way interrelationship exists between the demographic and socioeconomic variables. The model assumes that development outcomes affect the number, composition, and location of individuals. The application of the model to the Philippines used ordinary least squares and two stage least squares for estimation pertaining to the real sector, the fiscal sector, the financial sector, the external sector, and the price-wage-employment sector. The model combines classical, Keynesian, structuralist, and monetarist approaches. Domestic production is composed of agriculture, industry, and services in supply and demand equations. Expenditures are composed of personal consumption, gross domestic capital formation, exports, imports, and government expenditures. Further details of the model are described by Klein et al. and Mariano and Constantino.