what causes a demographic dividend

Demographic Dividend – Causes

• Falling birth rate
• Lower fertility rate
• Increased longevity

Full Answer

What are the different types of demographic dividends?

What is a 'Demographic Dividend'. Demographic dividend refers to the growth in an economy that is the resultant effect of a change in the age structure of a country’s population. The change in age structure is typically brought on by a decline in fertility and mortality rates. Next Up. Demographics. Gross Dividends. Cash Dividend.

How does the demographic dividend affect the dependency ratio?

With fewer younger dependents, due to declining fertility and child mortality rates, and fewer older dependents, due to the older generations having shorter life expectancies, and the largest segment of the population of productive working age, the dependency ratio declines dramatically leading to the demographic dividend.

Who coined the term demographic dividend?

Who coined the term Demographic Dividend? The term Demographic Dividend was coined by David Bloom. He emphasized the importance of demography to economic growth. David Bloom attributed a large portion of the economic growth of East Asia in 1965 to 1990 to the region’s working-age population,which led to increase in productivity.

What happens to the demographic dividend in retirement?

As the number of retirees who do not work but consume resources tends to accumulate, the demographic dividend tapers off, and can even turn negative after a while as the number of old retired and relatively debilitated people seeking service and medical care rises, while the workforce tends to fall due to lower fertility rates.

What is meant by demographic dividend?

The demographic dividend is the economic growth potential that can result from shifts in a population's age structure, mainly when the share of the working-age population (15 to 64) is larger than the non-working-age share of the population (14 and younger, and 65 and older).

What are the causes of demographic?

These include the progression of population growth rates; fertility and mortality rates; urbanization; pattern of migration and differences in the economic factors responsible for the timing and speed of these drivers of demographic change.

Why is a demographic dividend good?

Demographic dividend occurs when the proportion of working people in the total population is high because this indicates that more people have the potential to be productive and contribute to growth of the economy.

What stage is demographic dividend?

During the late stage, low mortality and fertility increase the share of the older population, a process known as population aging. Countries at the intermediate stage have the opportunity to exploit the first demographic dividend.

What are the key reasons for demographic change?

Reasons for demographic changemedicine – advances in medical science has improved medical treatments, drugs and surgical procedures.public hygiene – the health benefits which come from clean running water and sanitation are fundamental to prolonging life.More items...•

What causes demographic shift?

The rise in demand for human capital and its impact on the decline in the gender wage gap during the nineteenth and the twentieth centuries have contributed to the onset of the demographic transition.

How do you reap demographic dividends?

As fertility declines, the share of the young population falls and that of the older, dependent population rises. If the fertility decline is rapid, the increase in the population of working ages is substantial yielding the 'demographic dividend'.

What is a demographic dividend quizlet?

Demographic dividend. Demographic dividend refers to the growth in an economy that is the result of a change in the age structure of a country's population. The change in age structure is typically brought on by a decline in fertility and mortality rates.

What is the first demographic dividend?

The situation of having a relatively larger working-age population is related to the so-called first demographic dividend. As the working-age population matures, the prospect of retirement can provide the motivation to save for financial security.

What conditions should be fulfilled to ensure that the demographic dividend in the future?

Answer. While family planning is necessary for establishing the conditions for a demographic dividend, investments in child health, education, and gender equality are critical additional steps that contribute to family planning use and economic growth.

What are the 5 demographic factors?

The five main demographic segments are age, gender, occupation, cultural background, and family status.

What are 4 examples of demographics?

Demographic information examples include: age, race, ethnicity, gender, marital status, income, education, and employment. You can easily and effectively collect these types of information with survey questions.

What is the impact of demographic change?

Demographic change can influence the underlying growth rate of the economy, structural productivity growth, living standards, savings rates, consumption, and investment; it can influence the long‐​run unemployment rate and equilibrium interest rate, housing market trends, and the demand for financial assets.

What are the effects of demography to the economy?

Demographic changes can affect GDP growth through several channels. First, lower growth in population directly implies reduced labor input. Second, lower population growth has an indirect potentially negative impact on individual labor supply insofar as it leads to higher tax rates which reduce the incentive to work.

What is the most important thing to realize a demographic dividend?

The most essential are building the capabilities of people and ensuring their rights and freedoms to achieve their potential. Young people need the chance to gain the education and experience to succeed in a competitive global workplace, which demands more skills, education and technical expertise than ever before.

How to achieve a demographic dividend?

Achieving a demographic dividend requires that each country understand the size and distribution of its population, its current and projected age structure, and the pace of population growth. A growing number of analytic tools are available for such “population assessments,” shortening the time and resources needed for a situation analysis of national circumstances. National needs must be matched to a sequence of short- and medium-term investments that assure the rights of all young people to plan their lives, be free of violence and trauma, be assured of essential freedoms and reproductive rights, and have access to quality education and mentoring.

What are the policies that form the basis of policy guidance on the investments needed for a demographic dividend?

These include status and enforcement of laws on child marriage, protection of women’s rights, and youth policies, which form the basis of policy guidance on the investments needed for a demographic dividend.

What are national needs?

National needs must be matched to a sequence of short- and medium-term investments that assure the rights of all young people to plan their lives, be free of violence and trauma, be assured of essential freedoms and reproductive rights, and have access to quality education and mentoring.

What is UNFPA's role in the world?

UNFPA works with countries to help fulfill the rights of women and adolescent girls and to support their participation in school decision-making. UNFPA also partners with countries to deliver the sexual and reproductive health information and services that can contribute to a demographic dividend.

Why is the fulfillment of human rights important?

The fulfillment of human rights – including sexual and reproductive health and reproductive rights – is therefore essential for any society to achieve a demographic dividend.

Why is UNFPA important?

The rights and dignity of all people lie at the heart of development. This is why UNFPA, works to help countries realize the International Conference on Population and Development Programme of Action , which links investments in each person to sustainable development. Strategic assessment.

What is demographic dividend?

In simple terms, the demographic dividend is the economic growth that may result from changes to a country’s age structure, due to the shift from people living short lives and having large families to living long lives and having small families. Because of this change in age distribution, fewer investments are needed to meet the needs ...

What are the benefits of a shifting age structure?

1. Labor Supply. The economy is able to take in and productively employ more workers. Women are more likely to take jobs outside the home. 2.

Why is the labor force growing more rapidly than the population that is dependent on it?

Because of this change in age distribution, fewer investments are needed to meet the needs of the youngest age groups and resources are freed up for what is called the “economic gift.”. This means that the labor force is growing more rapidly than the population that is dependent on it, creating a window for faster economic growth and family welfare.

Why does GDP per capita increase?

An increase in GDP per capita due to the decreasing dependency ratio.

Is the demographic dividend automatic?

Ultimately, the benefits of the demographic dividend are not automatic. Reduced fertility by itself provides no guarantee of prosperity. The magnitude of the demographic dividend, thus, depends on the rate of fertility decline and the pace of population growth, the ability to productively employ the extra workforce, and the nature of political, economic and social reforms that countries adopt.

Do women take jobs outside the home?

Women are more likely to take jobs outside the home.

Why is there a strategic urgency to put in place policies which take advantage of the demographic dividend for most countries?

There is a strategic urgency to put in place policies which take advantage of the demographic dividend for most countries. This urgency stems from the relatively small window of opportunity countries have to plan for the demographic dividend when many in their population are still young, prior to entering the work force. During this short opportunity, countries traditionally try to promote investments which will help these young people be more productive during their working years. Failure to provide opportunities to the growing young population will result in rising unemployment and an increased risk of social upheaval .

Why is the dependency ratio declining?

With fewer younger dependents, due to declining fertility and child mortality rates, and fewer older dependents , due to the older generations having shorter life expectancies, and the largest segment of the population of productive working age , the dependency ratio declines dramatically leading to the demographic dividend.

Why does the demographic dividend occur when the proportion of working people in the total population is high?

Demographic dividend occurs when the proportion of working people in the total population is high because this indicates that more people have the potential to be productive and contribute to growth of the economy.

Why is Africa unique?

Africa, on the other hand has been unique demographically because fertility rates have remained relatively high, even as significant progress has been made decreasing the mortality rates. This has led to a continuing population explosion rather than a population boom and has contributed to the economic stagnation in much of Sub-Saharan Africa. The magnitude of the demographic dividend appears to be dependent on the ability of the economy to absorb and productively employ the extra workers, rather than be a pure demographic gift. According to the UN Population Fund, “If sub-Saharan African countries are able to repeat the East Asian experience, the region could realize a demographic dividend amounting to as much as $500 billion a year for 30 years. For countries like Uganda in the Eastern Africa which is currently (2019) one of the least developed countries in the world may take quite a long period of time if there are no consistent efforts towards achieving the demographic dividend.

Why is there a dividend between young and old?

In order for economic growth to occur the younger population must have access to quality education, adequate nutrition and health including access to sexual and reproductive health.

What was East Asia able to benefit from?

East Asia was able to benefit from knowledge, experience, and technology of other countries that had already passed through the demographic transition. It has been argued that the demographic dividend played a role in the "economic miracles" of the East Asian Tigers and accounts for between one fourth and two fifths of the “miracle”.

How to reap the benefits of a demographic dividend?

Therefore, in order to reap the benefits of a demographic dividend, countries must recognize and cultivate the potential of young people and close the gap between the demands placed on young people and the opportunities provided to them.

What are the 5 stages of Demographic Transition?

The 4 stages of Demographic Transition are Stage 1: In this stage the population is low but it is balanced due to high death rate and high birth rate.

Why is Demographic Dividend Important?

Historically demographic dividend has contributed upto 15% of the overall growth in advanced economies. Demographic Dividend helps in increasing the workforce, there will be rapid urbanisation and industrialisation. It leads to more investment in physical and human infrastructure. The productivity of the country’s economy increases due to increased labour force. Demographic Dividend will help in witnessing a massive shift towards middle-class society.

What is the meaning of demographic dividend?

Demographic Dividend meaning – It is the potential for economic gains when the share of the working-age population (15 years – 64 years) is higher than the non-working age group. Demographic dividend occurs when the proportion of working people in the total population is high because this indicates that more people have ...

Why is the working age population increasing in India?

At present, the working-age population in India is increasing because of rapidly declining birth rates, with our average annual population growth rates nearly half in the last decade, compared to what was seen in the 1970s. A key driver of this trend has been the steady decline in India’s total fertility rate (TFR), which is the number of births per woman or children likely to be born to a woman in her childbearing age. Interestingly, India has reached a TFR of 2.2, which is slightly lower than the global TFR value of 2.4.

Why is there a dividend between young and old?

In order for economic growth to occur the younger population must have access to quality education, adequate nutrition and health including access to sexual and reproductive health.

How does the Indian workforce contribute to the growth of the economy?

Indian workforce can fill this gap in India and abroad and result in greater economic growth. During the period of demographic dividend, the personal savings will grow , which means greater purchasing power, which can lead to the growth of the economy.

What is dependent ratio?

The dependency ratio is an age-population ratio of those typically not in the labor force (the dependent part ages 0 to 14 and 65+) and those typically in the labor force (the productive part ages 15 to 64). It is used to measure the pressure on the productive population.

How Long does Demographic Dividend lasts?

However, the exact period depends on the characteristics of a population. In most cases, it can vary from two to five decades, before the negative trend of demographic decay sets it.

How does the government reap the benefits of the demographic dividend?

To reap the benefits of demographic dividend, the government needs to play a proactive role in ensuring that the policies facilitate capital formation and deployment of that capital into production facilities that can then meaningfully employ the growing workforce. Very often, the ability of the government to address this need differentiates between those countries that are able to lift their economy by optimizing the demographic dividend and those who fail to utilize it.

What are the benefits of demographic dividend?

With the benefits of demographic dividend, China has leaped ahead in the race for economic dominance, to acquire a place of great eminence on the world stage, and is all set today to become the largest economy of the world in near future .

Which countries have experienced demographic dividends?

Most developed countries of today have experienced this phase of demographic dividend during the sixties, seventies and eighties. In particular, Japan’s example stands out, which reaped this benefit in the form of 10% rate of annual economic growth during the sixties and seventies to become the second largest economy of the world during the eighties. The experience of the countries of South East Asia has been similar, with almost all countries in that region having benefitted from varying degree of demographic dividend by attracting foreign investment and pursuing export led economic growth.

What are the challenges facing South Asia?

However, these countries face several constraints that pose a hurdle. These include conflicts, poor governance, less than optimum public policies and in particular, inadequate level of skill enhancement and entrepreneurial capacity building in their education systems.

What is China's advantage?

With the largest population in the world and a very low per capita income, China had the great advantage of cheap labor, which it made use of by following policies that facilitated large inflows of capital and technology into China, making it virtually the factory of the world. With the benefits of demographic dividend, ...

Is India a populous country?

India has the second largest population in the world, and is slated to overtake China in due course to become the most populous country in the world. Yet, unlike China, it is yet to reap the benefits of demographic dividend, as the number of dependents per worker has only begin to fall recently, though it will keep falling for another two decades or so from here on. Given its democratic polity and an extensively adversarial, rights based legal environment, India may not find it easy to impose policies to make the best of this demographic dividend.

Overview

Demographic dividend, as defined by the United Nations Population Fund (UNFPA), is "the economic growth potential that can result from shifts in a population’s age structure, mainly when the share of the working-age population (15 to 64) is larger than the non-working-age share of the population (14 and younger, and 65 and older)". In other words, it is “a boost in economic productivity that occurs when there are growing numbers of people in the workforce relative to th…

Recent education dividend theory

Statistical overview

Examples

Four mechanisms for growth in the demographic dividend

After the demographic dividend, demographic tax

See also