Population Matters

The ‘Demographic dividend’ effect

The ‘Demographic dividend’ effect

The demographic dividend can enable accelerated economic growthForty per cent of the population of the world’s least-developed countries (LDCs) is under the age of 15, and the total population of these countries is expected to double by 2050.

This poses great challenges, but if countries can lower fertility rates and reduce population growth, it also provides an incredible opportunity for accelerated economic growth.

This is the conclusion of Population Matter’s latest briefing paper, which examines the phenomenon known as the demographic dividend.

The term “demographic dividend” (DD) refers to the accelerated economic growth that a country can achieve when the proportion of its population that is of working age is greater than the proportion of its population that don’t work (e.g. children and the elderly). This population structure frees up household and state resources that would otherwise be used to support dependent groups and which can instead be invested to generate economic growth.

The briefing finds that in order to achieve a DD, countries with rapidly-growing populations need:

  1. Low fertility rates
  2. A healthy and educated population
  3. Female participation in the labour force
  4. A positive investment climate and appropriate infrastructure

Investment is needed in family planning services, sexual health and girls’ educationThe most important of these conditions is low fertility rates, as without this a country’s working age population will continue to have to support large numbers of children, thereby limiting resources available for investment.

The briefing concludes that to reduce fertility rates, and create the population structure necessary for a DD, LDCs must significantly increase investment in family planning services, sexual health and girls’ education.

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