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Achieving a demographic dividend

The demographic dividend refers to the accelerated economic growth that begins with changes in the age structure of a country’s population as it transitions from high to low birth and death rates. With fewer young people relative to the population of working-age adults, and with the successful implementation of key national policies over the long term, countries such as Thailand and Brazil have reaped many rewards from their demographic dividend.

This Population Bulletin explains the demographic dividend in terms of demographic changes, investments in human capital, and economic and governance policies. It highlights the experiences of Asian and Latin American countries in achieving their dividends and considers the prospects for African nations. The last section outlines issues that countries need to plan for as they move beyond their demographic dividend.

The authors argues that countries will eventually move beyond the dividend and have a larger and older population. To prepare for so many people of retirement age, countries will need to develop appropriate
social security and pension programs, or risk overburdening the working-age population. Managing the economic and health needs of an aging population is already a challenge for developed countries.

As the retired population grows, governments will need to maintain a large enough labor force to sustain their economies and living standards
– already a reality for the Asian Tigers, Western Europe, and the United States.