Demographic Trends and Implications for Development

Demographic Trends and

Implications for Development

John Bongaarts

Population Council

Outline

• Background: population growth and fertility

• Consequences of demographic trends

• Policy options

Population growth rates 2005-2010

-2

-1

0

1

2

3

4

0 2 4 6 8Gro

wth

rate

(%)

Births per woman

Population growth by fertility level

1.High fertility/growth

2. Intermediate fertility/growth

3. Low fertility/growth

Group 1

Demographic consequences of high fertility

• Rapid population growth

• Young age structure

0

20

40

60

80

100%

of p

opul

atio

n

Population by age (<25,>25)Age

>25

<25

0

2

4

6

8

10

12

1950 1975 2000 2025 2050

Rat

io (1

950=

1)

Youth (15-25) by country

Nigeria

Pakistan

India

China

Group1: Consequences of High fertility and rapid population growth

• Governmental: Lagging investment in education, health services and infrastructure

• Economic: Low wages, unemployment, poverty

• Environmental: Depletion of natural resources, pollution

• Political: Rising political unrest and crime

• Health: High maternal and child mortality

Group 2: Intermediate/ declining fertility

• Declining population growth rates

• Fewer young people, more workers

• Demographic dividend

Population by age: Mexico

Demographic Dividend:

Boosts growth in GDP/cap by raising

1) Relative size of workforce

2) Women’s participation in paid labor force

3) Investments in human and physical capital

30

40

50

60

70

1950 1975 2000 2025 2050

% o

f pop

ulat

ion

Working age population (%)

Developed world

Demographic Dividend

Developing world

1950 1975 2000 2025 2050

-%

Gro

wth

rate

GD

P/ca

p

+

Impact of demographic dividend on economic growth rate (GDP/cap)

Developing world

Developed world

Group 2: Consequences of Intermediate/declining fertility

• Governmental: Large investments in education, health services and infrastructure

• Economic: Demographic dividend

• Environmental: Depletion of natural resources, air, water and soil pollution

• Political: Inequality and disaffected voters

• Health: Declining maternal and child mortality

Group 3: Low fertility

• Near zero or negative population growth rates

• Rapid population aging

Population by age: Italy

0

0.2

0.4

0.6

0.8

1

1.2

1975 2000 2025 2050

Retirees/Worker

ItalySpainGermanyJapanFranceCanadaUKChinaUSA

0

0.2

0.4

0.6

0.8

1

1.2

1975 2000 2025 2050

Rat

ioPop 65+/Pop 20-64

Japan

Italy

Spain

Germany

France

Canada

China

UK

USA

Group 3: Consequences of low fertility

• Economic

Unsustainable health and pension costsRising governmental budget deficits

• Political Rising voting power of the elderly

Slower economic growth Slower growth in GDP/capSlower growth in worker productivity (?)

• Governmental

A. High fertility countries

B. Very low fertility countries

Policy options :

• Family planning programs to reduce

unplanned pregnancies

• Investments in human capital (e.g. girls

education)

• Delay childbearing

A. Policy options in high fertility countries:

B. Policy options in aging societies

Demographic optionsEncourage childbearing; permit more immigration.

Pension system options Reduce benefits; raise contributions; raise age at

eligibility; encourage private savings.

Labor force optionsEncourage higher labor force participation

and later age at retirement.

Conclusions

• Very high and very low fertility have net adverse effects

• Declining high fertility brings multiple benefits for human welfare and the environment

• Policies are available to maximize positive effects and minimize negative effects