Demographic dividend

We need to empower young girls to reap demographic dividend

Roughly one quarter of the world’s population is between 10 and 24 years old. The aspirations and achievements of these young people will shape the future. At the same time, fertility rates in many parts of the world are falling. A country with both increasing numbers of young people and declining fertility has the potential to reap a ‘demographic dividend’ – a boost in economic productivity that occurs when there are growing numbers of people in the workforce relative to the number of dependents.

Roughly one quarter of the world’s population is between 10 and 24 years old. The aspirations and achievements of these young people will shape the future. At the same time, fertility rates in many parts of the world are falling. A country with both increasing numbers of young people and declining fertility has the potential to reap a ‘demographic dividend’ – a boost in economic productivity that occurs when there are growing numbers of people in the workforce relative to the number of dependents.

UNFPA works with partners, including civil society, communities and governments, to encourage policies that can help realize this dividend. Such policies include improving access to quality education and jobs, as well as investing in the health, particularly the sexual and reproductive health, of young people.

More young people than ever

The total number of young people today is higher than it has ever been  there are about 1.8 billion people between ages 10 and 24  and it is expected to increase until about 2070, according to moderate population projections

Although many developed countries actually have shrinking populations of young people, the least developed countries have large and rapidly growing youth populations. Today, about 60 per cent of the population in the least developed countries is under age 24, and their ranks will increase by another 60 per cent by the middle of this century. These rising numbers of young people, accompanied by falling fertility rates, offer a critical window of economic opportunity.

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).

The potential for economic gains can be enormous, provided the right policies are in place and investments in human capital, particularly among young people, are substantial and strategic.

The transition

To realize a demographic dividend, a country must undergo a demographic transition – a shift from high fertility and mortality to low fertility and mortality. Mortality generally falls as child survival rates improve, mainly because of improved health and sanitation standards. Declines in fertility often follow, and as families have fewer children, household resources are freed up to make investments in their long-term well-being.

Over time, the children born during the early stage of this transition enter the labour force. When the labour force grows more rapidly than the population dependent on it, resources become available for investment in economic development. This offers an opportunity for rapid economic growth – if the right social and economic policies and investments are in place. 

In the 1950s and 1960s, several East Asian countries invested heavily in their youth and expanded access to voluntary family planning, enabling people to start families later and have fewer children. As fertility rates fell, there were fewer dependents and more resources available to create or expand businesses, build infrastructure and make productive investments. The result was unprecedented economic growth: The Republic of Korea, for example, saw its per-capita gross domestic product grow about 2,200 per cent between 1950 and 2008. Thailand’s GDP grew 970 per cent. Today, demographic shifts are taking place in about 60 countries, creating the conditions for a demographic dividend, according to the 2014 The State of World Population. 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.

Taking the right actions

To make the most of a demographic dividend, countries with falling fertility rates must undertake specific actions to empower young people to fulfil their potential. This includes encouraging decent employment, investing in education, and ensuring access to adequate nutrition and health – including unrestricted and universal access to sexual and reproductive health care.

Sexual and reproductive health care plays an important role in taking full advantage of the demographic dividend. When women are empowered to plan the number and spacing of their children, fertility levels tend to fall. Sexual and reproductive health care also reduces disease and injuries, ensuring people are better able to contribute to the economy. And women with access to these services are better able to continue working, strengthening the financial well-being of their families and communities.

Prospects for realizing the dividend

With their surging populations of young people, the least developed countries have the greatest opportunity to realize a demographic dividend. But they also confront the greatest challenges to doing so.

By the middle of this century, the population of the least developed countries will have doubled in size, adding 14 million young people to the working-age population each year. Creating conditions for decent livelihoods will be an enormous task, especially given that, currently, about 80 per cent of the people who work in these countries are unemployed, underemployed or irregularly employed. Additionally, the shortage of financial resources will make it difficult to maintain, let alone increase, spending on health, education and nutrition.

And there is a large gap between the demands that countries place on young people and the opportunities provided to them. In reality, large numbers of young people are not able to complete school or find productive, remunerative employment. Countries must recognize and cultivate the potential of young people – the most important resource any country has.

What is UNFPA doing?

In the Sahel region, the World Bank and UNFPA are collaborating to support countries in realizing the demographic dividend.  UNFPA also works with policymakers, encouraging increased investment in young people.

UNFPA also works to eliminate the barriers to economic and social empowerment facing young people – especially adolescent girls, who too often suffer discrimination and inequality at all levels. Preventing child marriage, keeping girls in school, and ensuring they have access to sexual and reproductive health care can go a long way towards improving their own lives and the lives of their families and communities. 

Arab region

Significant challenges to development in the last two decades have had profound effects on the economic, social and demographic changes in the Arab region. With one third of the region’s population under 15 years of age, youth aged 15-24 years increased from 49 million in 1995 to 70 million in 2015; those who are in the working age reached 63.4% in 2015. This youth bulge is the result of high fertility rates in the region in previous decades.

 

With a demographic growth of 2.2%, compared to the global annual average of 1.2%, and a high fertility of 3.5%, the Arab region is also home to some 11 million refugees, or about 6.3% of the population, and 58% of the world's total. Fifteen million of the region’s population is currently internally displaced, or 46% of the global figure. Conflicts and situations of displacement usually increase the occurrence of violence against women, including early marriage, child marriage, and trafficking, especially for girls.

 

Population movement, unprecedented rates of voluntary and forced migration and displacement, including migrant labor in the Gulf region in particular, high fertility rates and accelerated demographic growth, poor human capital, particularly among the young in some countries can strain the 2030 Sustainable Development Agenda, if not adequately addressed in policies and practices.

 

Most states in the region are yet to adequately invest in education, health, skills and opportunities accessible to young people aged 15-24 however, so as to turn this burgeoning youth population from a challenge to a great opportunity.

Family planning programs in the Arab region are still far less effective than what is necessary to achieve a positive demographic transition[1]. Most studies reveal that the majority of Arab states are still in pre-transition mode, notably Iraq, Mauritania, Sudan and the Comoros, or in early transition, where the percentage of the young is just increasing, as in Egypt, Jordan Palestine, Algeria, Syria, Libya, Yemen, Djibouti, Bahrain and Saudi Arabia. Some countries have managed to reach the later stages of the transition like Qatar, Kuwait, the UAE, Tunisia, Morocco, Lebanon and Oman, where lower fertility rates have allowed the youth category to be larger than that of children and elderly combined. This trend, if facilitated by adequate social policies, allows for more savings in households and better living standards.

 

UNFPA supported Arab countries in developing demographic profiles and producing demographic analysis, such as in Egypt and Morocco, informing government policies and national plans.

Cairo Declaration 2013 emphasized the benefits of the demographic opportunity while recommending:

  • Improving the quality of and access to education to adequately respond to labor market needs;
  • Ensuring the right of young people to decent work through effective policies that generate stable, safe, secure, non-discriminatory employment, especially in regard to gender;
  • Developing youth capacity for interaction and building healthy social relations, prevent social isolation, promote conscious sexual and reproductive health awareness;
  • Committing to prioritizing the creation of jobs and skilled work force by increased investment that foster youth entrepreneurship and provide capacity building to young people;
  • Actively involving young people in policies and national and regional programs;
  • Enabling effective participation of young people as volunteers and leaders of social change without being subjected to exploitation, violence or deprivation of rights;
  • Activating various mechanisms and joint Arab institutions dealing with youth issues for enhanced networking in support of greater efficacy and feasibility.

 

Last updated on 16 May 2017.