Charting the Course for Sustainable Aging: Socio-Environmental and Economic Impacts on Djiboutian Elderly Population

Abstract The aging population has become a crucial demographic trend worldwide, as it poses both economic and sustainable challenges to governments and societies. And, ostensibly, this unprecedented increase in the senior demographic is currently unfolding in East African nations, primarily, due to substantial advancements in the healthcare system and the commendable support and promotion of education within the region. In this context, the current article examines the relationship between the aging population, ecological footprint, consumption of renewable energy, governmental healthcare expenditures, trade, and urbanization within the context of the Republic of Djibouti. To investigate the data and explore the dynamics and interactions among variables, a comprehensive approach was employed, which involved utilizing an autoregressive distributed lag (ARDL) model, a Granger causality test, and both an impulse response function (IRF) and variance decomposition (VD) analyses. According to the ARDL findings, urbanization has a positive relationship with an aging population. In contrast, the health sector expenditures demonstrated a negative association with the elderly population in Djibouti. This indicates an alarming scenario where government spending on elderly care fails to effectively meet the specific needs of seniors due to insufficient funding, bureaucratic inefficiencies, and inadequate program implementation. Consequently, this leads to a significant gap in coverage for a large portion of the elderly population. On the other hand, it is worth noting that the well-being of the elderly population in Djibouti sees only a slight improvement influenced by the trade performance variable. Nonetheless, this positive impact is somewhat hindered by the lack of sufficient financial inclusion measures that should have ideally been driven by trade-related activities. Moreover, the study’s IRF and VR highlight a positive shock between the consumption of renewable energy and the well-being of the elderly population. Nevertheless, it is of utmost importance to recognize the detrimental impact of the ecological footprint, which significantly undermines the overall well-being of the aging population. Therefore, policymakers must carefully weigh and benefit the simultaneous effect of the advantages of renewable energy consumption on the environment, and on the well-being of the elderly population. It is also essential to emphasize the need to devise more inclusive policies that can comprehensively address this issue and improve the welfare of the elderly demographic.