DIVIDENDS How Age Structure Change Can Benefit Development

The demographic dividend is defined as the accelerated economic growth that can occur as a population age structure matures, given strategic investments in health, education, economic policy, and governance. This web feature expands the concept of the demographic dividend to project four potential sets of benefits—in addition to economic growth, it outlines benefits in child survival, education, and political stability. A country’s likelihood of making substantial gains in each of these four sectors is tied to its age structure.

This feature explains how each of these “dividends” becomes more likely as countries progress through the demographic transition from high fertility to low fertility. For each dividend, as a country’s population matures and reaches a specific age-structure threshold, the benefits of that specific dividend become more likely than not. Countries cannot reach these thresholds until fertility declines substantially, driven by increased use of voluntary family planning. With a better understanding of the potential benefits of age-structure change across four key development sectors, policymakers can effectively channel investments in family planning and other programs to promote a demographic transition and achieve development goals.

Health Dividend

Child Survival

Mortality rate of children under age 5 is less than or equal to 25 deaths per 1,000 live births.

Child mortality is a core indicator for child health and well-being. Reducing child mortality is essential to achieving Sustainable Development Goal 3, “Ensure healthy lives and promote well-being for all at all ages,” which includes a specific target for reducing child mortality:

Target 3.2: By 2030, end preventable deaths of newborns and children under 5 years of age, with all countries aiming to reduce under-5 mortality to at least as low as 25 deaths per 1,000 live births.

Investing in child health sets the stage for healthy adulthood.

Improving child survival also affects preferences about family size. Research shows that couples choose to have smaller families when they know that each child has a better chance of surviving. And when parents have fewer children, they are better able to invest in their children’s health, education, and well-being.

A transition to smaller families also promotes a smaller dependent population relative to the working-age population, advancing the country’s progress across the demographic transition.

A country becomes more likely to achieve a child survival dividend, measured by a mortality rate among children under age 5 of less than or equal to 25 deaths per 1,000 live births, when the median age of the population reaches 29 years.

Let’s explore a country’s likelihood of achieving the child survival dividend.

PERCENT LIKELIHOOD OF ACHIEVING CHILD SURVIVAL DIVIDEND BY MEDIAN AGE IN:

SELECT COUNTRY

STEP-BY-STEP GUIDE TO INTERPRET THE DATA
on
off

Country:

Year:

TFR:

Median Age:

Percent Likelihood:

MEDIAN AGE

To get started, select a country from the dropdown menu.

The bottom axis (X-axis) shows the median age of the population.

The left axis (Y-axis) shows the percent likelihood of achieving the child survival dividend.

The curved line that we see on the graph was generated statistically using historical data from countries that have achieved the child survival dividend. Each point on the curve shows the year, the total fertility rate in that year, the median age of the population in that year, and the percent likelihood of achieving the child survival dividend by that year. The likelihood of achieving the child survival dividend (measured as a percentage) is based on the median age. As the curve rises, the median age of the population increases and ’s likelihood of achieving the child survival dividend is greater.

When we hover over 2015, we see that the TFR in is , the median age is years and the likelihood of achieving the child survival dividend is percent.

In 2030, we see that the TFR is , median age is and the percent likelihood of achieving the child survival dividend has increased to percent.

By 2050, ’s TFR is , the median age is years and the likelihood that it will achieve the child survival dividend is percent. In other words, once the median age reaches years, is percent likely to achieve the child survival dividend.

's likelihood of achieving the child survival dividend is possible only if the country’s total fertility rate (TFR), or the average number of children a woman would have in her lifetime, continues to decline. Accordingly, a faster decrease in the TFR could accelerate ’s progress toward the child survival dividend.

EDUCATION DIVIDEND

Educational Attainment

Late secondary school enrollment rate at or above 60 percent.

Education is one of the most powerful and proven vehicles for sustainable development and is central to realizing the Sustainable Development Goals.

When both boys and girls have access to education, accelerated economic growth is possible. Secondary education—especially for girls—helps delay marriage and first pregnancy. Women who are educated are also more likely to work outside the home—increasing the size of the labor force and the potential for economic development.

Improving secondary school enrollment gives young people the skills to join a competitive global workforce and accelerates progress toward the educational attainment dividend.

A country becomes more likely to achieve an educational attainment dividend, measured by enrollment rates in late secondary school at or above 60 percent, when the median age of the population reaches 25 years.

Let’s explore a country’s likelihood of achieving the educational attainment dividend.

PERCENT LIKELIHOOD OF ACHIEVING EDUCATIONAL ATTAINMENT DIVIDEND BY MEDIAN AGE IN:

SELECT COUNTRY

STEP-BY-STEP GUIDE TO INTERPRET THE DATA
on
off

Country:

Year:

TFR:

Median Age:

Percent Likelihood:

MEDIAN AGE

To get started, select a country from the drop down menu.

The bottom axis (X-axis) shows the median age of the population.

The left axis (Y-axis) shows the percent likelihood of achieving the educational attainment dividend.

The curved line that we see on the graph was generated statistically using historical data from countries that have achieved the educational attainment dividend. Each point on the curve shows the year, the total fertility rate in that year, the median age of the population in that year, and the percent likelihood of achieving the educational attainment dividend by that year. The likelihood of achieving the educational attainment dividend (measured as a percentage) is based on the median age. As the curve rises, the median age of the population increases and ’s likelihood of achieving the educational attainment dividend is greater.

When we hover over 2015, we see that the TFR in is , the median age is years, and the likelihood of achieving the educational attainment dividend is percent.

In 2030, we see that the TFR is , the median age is and the percent likelihood of achieving the educational attainment dividend has increased to percent.

By 2050, ’s TFR is , the median age is years and the likelihood that it will achieve the educational attainment dividend is percent. In other words, once the median age reaches years, is percent likely to achieve the educational attainment dividend.

's likelihood of achieving the educational attainment dividend is possible only if the country’s total fertility rate (TFR), or the average number of children a woman would have in her lifetime, continues to decline. Accordingly, a faster decrease in the TFR could accelerate ’s progress toward the educational attainment dividend.

ECONOMY DIVIDEND

Income per Capita

Achievement of upper-middle income country status.

A healthy and educated population generates a productive labor force that contributes directly to increased wealth and poverty reduction.

When families use contraception because they choose to have fewer children, they have more disposable income and are better positioned to save and invest. This cycle strengthens the economy and helps move families out of poverty.

When governments implement sound economic policies that attract foreign investment, promote locally manufactured goods, and meet the employment needs of a growing labor force, it provides a solid foundation for rapid economic growth.

Reducing the ratio of the nonworking-age population to the working-age population, coupled with strategic investments that stimulate the economy, will allow a country to advance in its demographic transition, achieve an income dividend, and earn upper middle-income status.

Countries may reach lower middle-income status, defined as a GNI (or gross national income) per capita between $1,026 and $4,035, early in the age-structure transition. However, realizing an income per capita dividend of attaining upper middle-income status, defined as a GNI per capita between $4,036 and $12,475, becomes likely much later in the age-structure transition: at a median age of 31 years.

Let’s explore a country’s likelihood of achieving the income per capita dividend.

PERCENT LIKELIHOOD OF ACHIEVING INCOME PER CAPITA DIVIDEND BY MEDIAN AGE IN:

SELECT COUNTRY

STEP-BY-STEP GUIDE TO INTERPRET THE DATA
on
off
  • LOWER MIDDLE-INCOME
  • UPPER MIDDLE-INCOME

Country:

Year:

TFR:

Median Age:

Percent Likelihood:

MEDIAN AGE

To get started, select a country from the drop down menu.

The bottom axis (X-axis) shows the median age of the population.

The left axis (Y-axis) shows the percent likelihood of achieving the income per capita dividend.

The curved lines that we see on the graph were generated statistically using historical data from countries that have achieved the income per capita dividend. There are two curved lines: one for attaining lower middle-income status and the other for attaining the income per capita dividend of upper-middle income status. Each point on the curve shows the year, the total fertility rate in that year, the median age of the population in that year, and the percent likelihood of achieving the income per capita dividend by that year. The likelihood of achieving the income per capita dividend (measured as a percentage) is based on the median age. As the curve rises, the median age of the population increases and ’s likelihood of achieving the income per capita dividend is greater.

When we hover over 2015, we see that the TFR in is , the median age is years, and the likelihood of achieving the income per capita dividend is percent.

In 2030, we see that the TFR is , the median age is and the percent likelihood of achieving the income per capita dividend has increased to percent.

By 2050, ’s TFR is , the median age is years and the likelihood that it will achieve the income per capita dividend is percent. In other words, once the median age reaches years, is percent likely to achieve the income per capita dividend.

’s likelihood of achieving the income per capita dividend is possible only if the country’s total fertility rate (TFR), or the average number of children a woman would have in her lifetime, continues to decline. Accordingly, a faster decrease in the TFR could accelerate ’s progress toward the income per capita dividend.

POLITICAL STABILITY DIVIDEND

Political Stability

Absence of civil conflict for a
period of at least 10 years.

Countries that have a youthful age structure are at an increased risk of civil conflict and political violence, particularly if few economic opportunities exist for young people who are entering the labor force.

Civil conflict is relatively rare among all countries, but is more common among youthful ones. Among countries with a youthful population of more than 60 percent under the age of 30, even those that have not had a civil conflict in the last five years, one in four is likely to experience a new civil conflict in the next decade.

To reduce the risk of civil conflict, countries can promote programs and policies that advance progress along the demographic transition, such as increasing educational opportunities, particularly secondary school education, for young men and women.

Secondary school education can temper the risk of armed conflict often posed by a large young population. It can also delay first marriage and pregnancy among young women and, in turn, reduce fertility and help shift the age structure.

By providing educational and employment opportunities, countries with youthful populations can continue to advance through the demographic transition and achieve the political stability dividend.

A country becomes more likely to achieve a political stability dividend and be free from civil conflict for at least 10 consecutive years when the median age of the population is 21 years.

Let’s explore a country’s likelihood of achieving the political stability dividend.

PERCENT LIKELIHOOD OF ACHIEVING POLITICAL STABILITY DIVIDEND BY MEDIAN AGE IN:

SELECT COUNTRY

STEP-BY-STEP GUIDE TO INTERPRET THE DATA
on
off

Country:

Year:

TFR:

Median Age:

Percent Likelihood:

MEDIAN AGE

To get started, select a country from the drop down menu.

The bottom axis (X-axis) shows the median age of the population.

The left axis (Y-axis) shows the percent likelihood of achieving the political stability dividend.

The curved line that we see on the graph was generated statistically using historical data from countries that have achieved the political stability dividend. Each point on the curve shows the year, the total fertility rate in that year, the median age of the population in that year, and the percent likelihood of achieving the political stability dividend by that year. The likelihood of achieving the political stability dividend (measured as a percentage) is based on the median age. As the curve rises, the median age of the population increases and ’s likelihood of achieving the political stability dividend is greater.

When we hover over 2015, we see that the TFR in is , the median age is years, and the likelihood of achieving the political stability dividend is percent.

In 2030, we see that the TFR is , the median age is and the percent likelihood of achieving the political stability dividend has increased to percent.

By 2050, ’s TFR is , the median age is years and the likelihood that it will achieve the political stability dividend is percent. In other words, once the median age reaches years, is percent likely to achieve the political stability dividend.

’s likelihood of achieving the political stability dividend is possible only if the country’s total fertility rate (TFR), or the average number of children a woman would have in her lifetime, continues to decline. Accordingly, a faster decrease in the TFR could accelerate ’s progress toward the political stability dividend.

Moving Forward

Progressing through a demographic transition—when a country moves from high birth and death rates to lower birth and death rates—and the resulting change in population age structure are essential to achieving any of the four dividends. To do so, governments must first work to improve child survival and reduce fertility by promoting the planning and spacing of births through voluntary family planning.

Yet, while child survival has improved in many of the world’s least-developed countries, declines in fertility have been slow. Millions of women have more children than they desire. If current trends continue, the large size of the young population relative to the working-age population will delay all four demographic dividends.

Lowering fertility levels and shifting the age structure of the population is a critical first step toward achieving any demographic dividend. More than 214 million women around the world already want to delay and space their pregnancies, but are not using a modern method of contraception. Meeting this need will improve their well-being as well as support a demographic transition.

Countries must provide women with voluntary family planning information and services. Family planning helps couples achieve their desired family size and contributes to improved child health through promoting healthy timing and spacing of pregnancies.

With the right investments across all sectors, including transforming the age structure of the population, countries can increase the likelihood of achieving each benefit across the demographic transition, and ultimately harness the benefits of a full demographic dividend.

EDUCATION
HEALTH
POLITICAL STABILITY
ECONOMY