Working Paper: NBER ID: w22560
Authors: David E. Bloom; Michael Kuhn; Klaus Prettner
Abstract: We assess Africa’s prospects for enjoying a demographic dividend. While fertility rates and dependency ratios in Africa remain high, they have started to decline. According to UN projections, they will fall further in the coming decades such that by the mid-21st century the ratio of the working-age to dependent population will be greater than in Asia, Europe, and Northern America. This projection suggests Africa has considerable potential to enjoy a demographic dividend. Whether and when it actually materializes, and also its magnitude, hinges on policies and institutions in key realms that include macroeconomic management, human capital, trade, governance, and labor and capital markets. Given strong complementarities among these areas, coordinated policies will likely be most effective in generating the momentum needed to pull Africa’s economies out of a development trap.
Keywords: Demographic Dividend; Fertility Rates; Dependency Ratios; Economic Growth
JEL Codes: J11; J13; J16; O10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Decline in fertility rates (J13) | Increase in the working-age population relative to dependents (J19) |
| Reducing total fertility rate (TFR) by 0.5 children per woman (J13) | Increase in per capita GDP (O49) |
| Increase in the working-age population relative to dependents (J19) | Enhancement of the economy's labor force and savings capacity (E20) |
| Decline in fertility rates (J13) | Decrease in dependency ratio (J19) |
| Decrease in dependency ratio (J19) | Greater per capita output (P19) |
| Increase in per capita GDP (O49) | Increase in annual economic growth (O49) |
| Fulfilling unmet contraceptive needs (J13) | Increase in per capita income (O49) |