Definition
The demographic dividend is the boost to economic growth that a country can gain when the share of its working-age population (usually 15–64 years) rises relative to dependants, provided those workers are healthy, skilled and productively employed.
Background and evolution
The concept was popularised by economists studying Asian growth in the 1990s, including David Bloom and Jeffrey Williamson, who argued that changing age structures explained a large share of the 'East Asian miracle'. Their work emphasised that policy choices, such as investment in schooling and openness to trade, decided whether countries gained.
When a country moves from high to low birth and death rates, a process called the demographic transition, its age structure changes. For a period of a few decades, there are fewer children to support and not yet many elderly people, while a large cohort is of working age. If these people find jobs, the economy has more producers per consumer, households can save more, and governments can spend more on investment rather than on supporting dependants. Economists estimate that a significant part of East Asia's rapid growth from the 1960s to the 1990s came from such a dividend, combined with strong education, health and export-oriented jobs.
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