The “demographic dividend” is the concept that the change in the population structure of a country gives it the potential – in the right conditions – to secure positive change in its economic trajectory.
This is what it would look like in Africa…
By 2050, the continent’s population will more than double. It will remain the world’s youngest region, with a median age under 25 years old.
This youth bulge represents a game-changing, one-off opportunity to accelerate economic growth across the continent. If the young people entering the workforce during this period have the skills and capacity to lead productive lives, it can create a “demographic dividend” – an economic surplus that can massively increase incomes and living standards. But this dividend isn’t automatic. It requires investment in children and young people now, before it’s too late.
Big Win Philanthropy supports leaders to make such investments while there is still time.
The stages of the demographic dividend
There are four stages of a potential demographic dividend:
Stage 1: Youth bulge is created
Falling child mortality due to factors including vaccinations, access to primary healthcare, better sanitation, and nutrition means that a larger proportion of children survive than in previous generations, creating a youth bulge.
Investments in human capital must be initiated during this stage in order to set the conditions for the demographic dividend to be realized.
Stage 2: Fertility rate falls
As parents become more confident that children will reach adulthood, they choose to have fewer children, so subsequent generations are smaller.
Investments in key attributes of child and youth development (as well as contraceptive access and education) must be intentionally and aggressively pursued during this stage.
Stage 3: “Bulge” generation enters workforce
As the children in the “bulge” generation mature and enter the workforce, there is temporarily a larger ratio of workers compared to dependents (children and elderly people who need to be provided for).
If the right investments have been made to enable the “bulge” generation to succeed in the workforce, this can create a surplus of wealth that can be used to improve living standards and increase investment for the future, generating a demographic dividend.
Stage 4: “Bulge” generation ages and becomes dependent
Finally, as the “bulge” generation enters old age and itself becomes dependent, the ratio of workers to dependents falls.
At this stage, the opportunity to gain a demographic dividend has ended.
The human capital investments needed to realize the demographic dividend
Human capital investments during the first two stages outlined above are essential to realize the demographic dividend and generate strong economic growth for generations to come.
As you pivot from the point of managing mortality and fertility, there are three key areas where we feel the evidence supports concentration of effort: brain development, education for productivity, and youth employment.
Big Win works with leaders in developing countries to design and implement investments in these areas, thus setting the stage to fulfill the promise of the demographic dividend and secure stable, long-term economic growth. Learn more about our approach.