The demographic dividend is the economic growth that may result from changes to a country’s age structure. The shifts in age structure are driven by a transition from people living short lives and having large families to living long lives and having small families. These changes can usher in better living standards for families and higher incomes per person.
Long-term fertility decline is the most important factor for accelerating and amplifying the demographic dividend. This is because declining fertility opens the window of opportunity for the dividend. Access to voluntary, rights-based family planning coupled with improved health and lowered desired family size leads to fewer children, and a growing share of working-age adults.
Find out more about the demographic dividend and family planning here. Read on for a condensed version of our policy brief, 10 Things You Should Know About Family Planning and the Demographic Dividend.
- What is the demographic dividend? The demographic dividend is the economic growth that may result from changes to a country’s age structure. These changes can usher in better living standards for families and higher incomes per person, assuming the right policies are in place.
- What does family planning have to do with the demographic dividend? Long-term fertility decline is the most important factor for accelerating and amplifying the demographic dividend. This is because declining fertility opens the window of opportunity for the dividend. Access to voluntary, rights-based family planning coupled with improved health and lowered desired family size leads to fewer children, and a growing share of working-age adults.
- How do you know if a country is poised to achieve the demographic dividend? An important way of identifying the window of opportunity for the dividend is the shift in age structure that comes with investments in family planning. This demographic transition, along with educational and economic investment that create jobs for the growing working-age population can help usher in the opportunity to capitalize on the dividend. Because the size of this dividend depends on how fast the support ratio— the proportion of working people to non-workers—increases, it is essential that educational and economic opportunities for women and youth are part of the equation.
- How does empowering women and girls contribute to the demographic dividend? When women and girls have equal access to education, economic opportunities, and rights, countries benefit from increased development and economic growth. Increased access to family planning and reproductive health services support women’s social and economic well-being. Teenage girls who have access to family planning are more likely to stay in school, giving them better opportunities to obtain a secure income and fully contribute to a country’s economic growth. In turn,well-educated women with access to family planning often choose to have fewer children than their less-educated counterparts.
- How can investments in youth contribute to the demographic dividend? An estimated 43 percent of people around the globe are under the age of 25. This means that countries will have large numbers of people entering the workforce each year. Investing in young people, through education and by providing access to family planning, is critical for seizing the demographic dividend.
- Which countries have had a demographic dividend? South Korea, Singapore, Taiwan and Thailand experienced spectacular economic growth during the second half of the 20th century, much of which was due to the demographic dividend.
- What are the barriers to achieving the demographic dividend in sub-Saharan Africa? Despite the fact that mortality has declined substantially, women in sub-Saharan Africa currently have more than 5 children on average, representing a modest decrease from the average of 6.5 children that they had in the 1950s. As a result, the share of the economically active population has barely expanded. Compared to Latin America and Asia, a slower pace of fertility decline has characterized sub-Saharan Africa, with stalls and even reversals along the way.
- What opportunities do countries have with the demographic dividend? The growth in income per person could be substantial in Africa if countries are able to achieve the demographic dividend. A rate of fertility decline that follows the United Nations medium fertility variant—the most likely future path— could boost per-person income by 6.5 percent in Nigeria to almost 27 percent in Ethiopia by 2040. Stronger investments in family planning and reproductive health programs could further accelerate fertility declines, leading to an even greater cumulative income boost and a larger dividend.
- Are donors and governments providing family planning resources to make the demographic dividend possible? Donors and country governments are not providing enough funding to satisfy needs. According to the latest estimates, more than $12.6 billion was needed for family planning and sexual and reproductive health in sub-Saharan Africa in 2011.
- What kinds of policies and programs are key to the demographic dividend? For a full list of policies and programs, please see our policy brief.