The demographic dividend is economic growth resulting from a change in the age structure of a country’s population. A demographic dividend arises when a falling birth rate changes the age distribution of a population; this means that fewer investments are needed to meet the needs of the youngest age groups and that there are relatively more adults in the population of the productive labour force. This creates an opportunity for more rapid economic growth and human development for a country as more resources are available for investment in economic development and family welfare.
The demographic transition, or the point when birth and death rates change from a high level to a low level, therefore is a critical moment of development opportunity for families and countries. If countries plan for and make the necessary investments in young people during the demographic transition, they can create a virtuous cycle of increasing education, human capital and economic productivity.
This is the path out of poverty that the Asian Tigers and later many Latin American countries took. Studies have shown that no country has developed socioeconomically without a parallel decline in birth rates.
This policy brief also covers information on how to support a demographic dividend in Africa and resources to consult for further information.
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