Education rather than age structure brings demographic dividend

Wolfgang Lutz (), Jesus Crespo Cuaresma, Endale Kebede, Alexia Fürnkranz-Prskawetz, Warren C. Sanderson and Erich Striessnig
Additional contact information
Wolfgang Lutz: Wittgenstein Centre for Demography and Global Human Capital (International Institute for Applied Systems Analysis, Vienna Institute of Demography/Austrian Academy of Sciences, Vienna University of Economics and Business Administration), International Institute for Applied Systems Analysis, Laxenburg, Lower Austria 2361, Austria
Endale Kebede: Wittgenstein Centre for Demography and Global Human Capital (International Institute for Applied Systems Analysis, Vienna Institute of Demography/Austrian Academy of Sciences, Vienna University of Economics and Business Administration), International Institute for Applied Systems Analysis, Laxenburg, Lower Austria 2361, Austria
Warren C. Sanderson: Wittgenstein Centre for Demography and Global Human Capital (International Institute for Applied Systems Analysis, Vienna Institute of Demography/Austrian Academy of Sciences, Vienna University of Economics and Business Administration), International Institute for Applied Systems Analysis, Laxenburg, Lower Austria 2361, Austria
Erich Striessnig: Wittgenstein Centre for Demography and Global Human Capital (International Institute for Applied Systems Analysis, Vienna Institute of Demography/Austrian Academy of Sciences, Vienna University of Economics and Business Administration), International Institute for Applied Systems Analysis, Laxenburg, Lower Austria 2361, Austria

Proceedings of the National Academy of Sciences, 2019, vol. 116, issue 26, 12798-12803

Abstract: The relationship between population changes and economic growth has been debated since Malthus. Initially focusing on population growth, the notion of demographic dividend has shifted the attention to changes in age structures with an assumed window of opportunity that opens when falling birth rates lead to a relatively higher proportion of the working-age population. This has become the dominant paradigm in the field of population and development, and an advocacy tool for highlighting the benefits of family planning and fertility decline. While this view acknowledges that the dividend can only be realized if associated with investments in human capital, its causal trigger is still seen in exogenous fertility decline. In contrast, unified growth theory has established human capital as a trigger of both demographic transition and economic growth. We assess the relative importance of changing age structure and increasing human capital for economic growth for a panel of 165 countries during the time period of 1980–2015. The results show a clear dominance of improving education over age structure and give evidence that the demographic dividend is driven by human capital. Declining youth dependency ratios even show negative impacts on income growth when combined with low education. Based on a multidimensional understanding of demography that considers education in addition to age, and with a view to the additional effects of education on health and general resilience, we conclude that the true demographic dividend is a human capital dividend. Global population policies should thus focus on strengthening the human resource base for sustainable development.

Keywords: demography; economic growth; education; age structure (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.pnas.org/content/116/26/12798.full (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nas:journl:v:116:y:2019:p:12798-12803

Access Statistics for this article

More articles in Proceedings of the National Academy of Sciences from Proceedings of the National Academy of Sciences
Bibliographic data for series maintained by PNAS Product Team ().