Achieving the demographic dividend requires sufficient investment in human capital development to produce a workforce capable of maximizing the countrys economic potential. As fertility rates decrease, a countrys workingage population grows larger relative to the young dependent population. This study has paid attention whether the demographic dividend has affected to the economic growth in developed and. In this background, this article attempts to study how economic growth of any country gets influenced by its demographic dividend.
The relationship between demographic change and economic growth in the enlarged eu report for tender vt2005035. Applying this specification to the data on indian states, we reach three principal conclusions. An application of cobbdouglass cd and generalized cobbdouglass gcb model presentation pdf available november 2016 with 633 reads. It depends, of course, on several complex factors, including the nature and pace of demographic change, the operation of labor and capital markets, macroeconomic management and trade policies, governance, and human capital accumulation. Fertility, female labor force participation, and the. Cai and wang introduced the variable of total dependency ratio that represented the demographic dividend into the steady economic growth model 4 5. By katie luoma december, 2016 despite the challenges of population growth, ethiopia is on the path to a population age structure suitable to experience a demographic dividend. As is widely appreciated, the demographic dividend is transitory. The demographic dividend demographic window of opportunity or demographic bonus would have a positive impact on economic growth. School of economics central university of finance and economics beijing, china.
A demographic dividend is the accelerated economic growth that can result from improved reproductive health, a rapid decline in fertility, and the subsequent shift in population age structure. The rapid reduction in fertility and child mortality has accelerated ethiopias path toward the demographic dividend. The economic and social research foundation esrf thdr 2014. Demographic dividend is a timelimited opportunity, and policymakers should have a greater incentive to redouble their efforts to promote human capital so. Tanzania demographic dividend research brief july 2014 final. The demographic dividend dd is an opportunity for economic growth, development and improved wellbeing that arises from changes in the population age structure. Results show that the global first demographic dividend lasts about 50 years and add about 0. We propose a decomposition of the demographic dividend, into age and education effects. The industrial revolution that brought unprecedented economic growth to western europe and north america also coincided with a new epoch in population dynamics galor, 2005. Pdf fertility, the demographic dividend, and economic. The demographic dividend or the demographic window arises because the workingage populations are growing more rapidly than the number of consumers. Demographic transition and economic growth in china. The impact of population structure on economic growth has been studied in recent decades using different methods to estimate the so. With fewer births each year, a countrys workingage population grows larger in relation to the young dependent population.
Demographic dividend unfpa united nations population fund. Africas youth the afdb and the demographic dividend. Achieving a demographic dividend requires that each country. Economic growth in africa 25 policies to speed up the demographic transition 32 policies to reap the demographic dividend 34 notes 37 references 37 box o. Demographic factors and economic growth the characterization of modeling the relationship between demographic factors and economic development has been challenged and debated since the time of malthus 1798. This result is robust to corrections for the possible response of interstate migration to differential economic growth, and to a twostage. Section 3 examines indias economic prospects through a demographic lens and discusses policy issues related to the realization of.
Lecturer, yunnan college of business management abstract population has become the main factor restricting economic development in recent years. According to the united nations population fund unfp, it simply means, the economic growth potential resulting from shifts in a populations age structure, mainly when the share of the workingage population 15 to 64 is. In this study, we have selected brazil, russia, india, china and south africa brics and the european union to see this relationship between two variables economic growth and demographic dividend using fixed effect. Nonetheless, the demographic dividend model can account for. According to economic survey 201819, indias demographic dividend will peak around 2041, when the share of workingage,i. Population dynamics in india and implications for economic. How does demographic dividend impact on the indias.
By katie luoma july 12, 2016 in simple terms, the demographic dividend is the economic growth that may result from changes to a countrys age structure, due to the shift from people living short lives and having large families to living long lives and having small families. The country has made progress in improving health and development of its people, however, the benefits of a demographic dividend will. The object of research is the first demographic dividend. Because of this change in age distribution, fewer investments. One definition of the demographic dividend is a large workforce that creates a window of opportunity to invest in the education and health of their children, increase economic outputs and invest more in technology and skills to strengthen the economy. This chapter examines the demographic transition that all countries experience as social and economic development progresses, discusses the mechanisms by which its impacts are felt, and highlights the opportunity for economic growththe demographic dividendthat this transition offers to developing nations.
Besides, education has been pointed out as a key factor in economic growth. The potential for a substantial demographic dividend in the sahel if fertility rates decline fast enough, africa could realize a large demographic dividend. When this happens, the dividend can boost economic growth and productivity, raising incomes and allowing families and governments to invest more in the health, education. Quantify the demographic dividend contribution to economic growth of changes in fertility, mortality, and age structure that occur over the. The demographic transition theory was first introduced by kirk 1996 and defines. Demographic transitions and the demographic dividend chapter three. With fewer births each year, a countrys workingage population grows larger relative to the young dependent population. The last part of this section introduces the theoretical model of the relationship between the income per capita and economic growth, which is the basis of the demographic dividend simulation. The hypothesis is that the growth of the share of the labourage population in russia has contributed positively to the growth rate of real gdp per capita. The demographic dividend is the name given by harvard economists david bloom and david canning to the boost in economic growth that can result from changes in a countrys population age structure. The debate over the effects of population growth on economic growth. Potential output growth demographic factors made a substantial contribution to potential growth in advanced and emerging market economies during 200007, though this has fallen since the 2008 global crisis contribution of demographics on potential growth source.
The relationship between demographic change and economic growth in the eu. Case studies of population change and economic growth. Realizing the demographic dividend the demographic dividend is the accelerated economic growth that may result from a rapid decline in a countrys fertility and the subsequent change in the population age structure. Keywords fertility labor supply demographic dividend jel classi. The opportunity for the dividend occurs with a lower fertility rate and an increased share of workingage adults. Research on demographic dividend, lewis turning point, saving and economic growth qiong han, ph. Ethiopia and the demographic dividend population education. Demographic dividend is a phenomenon which occurs when the proportion of working population out of the total population is high. Research on demographic dividend, lewis turning point. When fertility rates decline signicantly, the share of the workingage population increases in relation to previous years.
According to united nations population fund unfpa, demographic dividend means, the economic growth potential that can result from. According to the united nations population fund unfpa, the demographic dividend refers to the economic growth potential that can result from shifts in a populations age structure, mainly. Impact of the demographic dividend on economic growth. Reform and support systems for the elderly in developing. An operational tool for countryspecific investment decisionmaking in predividend countries english abstract the objective of this demographic dividend operational tool for predividend countries is to help teams from government, the world bank, and other partners have productive policy dialogues to. The demographic dividend refers to the accelerated economic growth that begins with changes in the age structure of a countrys population as it shifts from high to low birth and death rates during the demographic transition. From demographic dividend to reform dividend by cai fang edward elgar, cheltenham, 2016 pp. The demographic dividend is the economic growth potential that can result from shifts in a populations age structure, mainly when the share of the workingage population 15 to 64 is larger than the nonworkingage share of the population 14 and younger, and 65 and older. Fertility, the demographic dividend, and economic growth 1. The demographic dividend is the accelerated economic growth that may result from a rapid decline in a countrys fertility and the subsequent change in the population age structure. The relationship between chinas population structure. By contrast, if most of a nations population falls within the working ages, the added productivity of this group can produce a demographic dividend of economic growth, assuming that policies to take advantage of this are in place. The effect of education on the demographic dividend.
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