GLOBAL MONITORING REPORT 2015/2016 Development Goals in an Era of Demographic Change MARCIO CRUZ DEVELOPMENT PROSPECTS GROUP
GLOBAL MONITORING
REPORT 2015/2016Development Goals in an Era of Demographic
Change
MARCIO CRUZ
DEVELOPMENT PROSPECTS GROUP
Global Monitoring Report 2015/2016
Implications of Demographic Change:
Pathways to Prosperity
Rapid population growth is set to continue in the
poorest countries over the coming decades.
In contrast, countries with low fertility rates,
including most high-income countries, have aging population structures.
Plan of talk
• A new demographic typology
• How demographics impact:
• Economic growth
• The achievement of development goals
• The nature of public transfers
Demographic Patterns: Stark Diversity across Countries
2
0
1
2
3
4
5
6
7
8
9
45 55 65 75 85
Life expectancy (years)
Pre-dividend Early-dividendLate-dividend Post-dividend
To
tal F
ert
ility
Ra
teCountries are at different stages of demographic transition
Defining a demographic typology
3
Growth of Working-
age Population
Share, 2015-30
Total Fertility Rate, 1985 Total Fertility Rate, 2015
< 2.1 ≥ 2.1 < 4 ≥ 4
<= 0 Post-dividend Late-dividend
>0 Early-dividend Pre-dividend
Note: The working-age population is defined as the share of the population aged between 15
and 64 years. Total fertility rate is the average number of births per woman in her lifetime.
Criteria for the demographic typology:
Demographic Patterns: Stark Diversity across Countries
4
The world can be divided into pre-, early-, late- and post-dividend countries
Most low-income countries are pre-dividend while most high-income
countries are post-dividend
5
0
5
10
15
20
25
30
35
40
45
Pre-dividend Early-dividend Late-dividend Post-dividend
Low-income countries Lower-middle-income countriesUpper-middle-income countries High-income countries
0
10
20
30
40
50
60
70
Pre-dividend Early-dividend Late-dividend Post-dividend
70 percent of the global population lives
in early- and late-dividend countries
Most pre-dividend countries are low-income while
most post-dividend countries are high-income
Sh
are
of g
lob
al p
op
ula
tion
, 2
01
5 (
%)
Nu
mb
er
of co
un
trie
s, 2
01
5
Global development and demographic disparities
6
Ave
rag
e p
ove
rty h
ea
dco
unt ra
te a
nd
sh
are
of g
lob
al p
ove
rty,
pe
rce
nt
0
10
20
30
40
50
60
Pre-dividend Early-dividend Late-dividend
Average poverty headcount rate
Share of global poverty
0
10
20
30
40
50
Pre-dividend Early-dividend Late-dividend Post-dividend
LIC LMC UMC HIC
Co
ntr
ibu
tion
s to
glo
ba
l G
DP
gro
wth
, 2
00
0-1
4 (
pe
rce
nt)
87 percent of global poverty is in
pre- and early-dividend countries
78 percent of global growth was from
late- and post-dividend countries
Centers of global poverty Engines of global growth
Demographic transition is associated with geographic distribution of
population within countries
7
10
20
30
40
50
60
70
80
1990 2013
Pre-dividend Early-dividendLate-dividend Post-dividend
Early-dividend countries are urbanizing
rapidly
10
20
30
40
50
60
70
80
1990 2014
Pre-dividend Early-dividend Late-dividend
A large share of the population of early- and late-
dividend countries still lives in slums
Share
of
popula
tion liv
ing
in u
rban a
reas
(%)
Share
of
urb
an p
opula
tion
livin
g in s
lum
s (%
)
Fertility rates and life expectancy have converged
8
1
2
3
4
5
6
7
Pre-dividend Early-dividend Late-dividend Post-dividend
1950-1955
2010-2015
30
40
50
60
70
80
Pre-dividend Early-dividend Late-dividend Post-dividend
1950-1955
2010-2015
Fertility rates in late-dividend
countries have converged to those of post-
dividend countries since the 1950s
Differences in life expectancy across
typologies of countries have narrowed
To
tal fe
rtili
ty r
ate
Lif
e e
xpecta
ncy (
years
)
Prospects of development and demographic disparities
9
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Pre-dividend Early-dividend Late-dividend Post-dividend
1980-2015 2015-50
An
nu
al g
row
th o
f p
op
ula
tio
n 1
5-6
4
(pe
rce
nt)
0
5
10
15
20
25
30
1950 60 70 80 90 2000 10 20 30 40 2050
Pre-dividend Early-dividendLate-dividend Post-dividend
Global working-age population growth will be
dominated by the centers of global poverty
Aging already advanced or accelerated in
the engines of global growth
Sh
are
of p
op
ula
tio
n, a
ge
s 6
5+
(%
)
Demographic change can boost growth
10
-4
-2
0
2
4
6
8
-10 0 10 20 30Ave
rag
e a
nn
ua
l ch
an
ge
in
re
al G
DP
p
er
ca
pita
, 1
96
0-2
014
Change in the share of the working-age population, 1960-2014
• An increase of 1 percentage point in
the working-age population share is
estimated to boost GDP per capita by
1.1 to 2.0 percentage points, on
average.
• An increase of 1 percentage point in
the share of working-age population
is associated with an increase of 0.6
to 0.8 percentage point in savings.
A rising working-age population share is
positively correlated with GDP per capita
growth
12
0
10
20
30
40
50
60
70
80
90
100
EAP SAR SSA
Child dependency ratio
1990 2012
0
10
20
30
40
50
60
70
80
90
100
EAP SAR SSA
Poverty headcount
1990 2012
Lower child-dependency ratios are
associated with lower poverty rates
Changing demographics can step up development
• A reduction of 1 percentage point in the
child dependency ratio is associated
with a reduction of 0.38 percentage
point in the poverty rate.
Pe
rce
nt
T60 population tend to have lower child-dependency ratios than B40
population in countries in all income categories
13
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
NE
R
UG
A
TC
D
BF
A
MO
Z
MD
G
ML
I
BD
I
MW
I
AF
G
TG
O
TZ
A
ZA
R
GIN
RW
A
ET
H
CO
M
GN
B
NP
L
LB
R
SL
E
HT
I
B40 T60
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
CM
RM
RT
SE
NY
EM
SD
NK
EN
SW
ZG
TM
PA
KC
OG
GH
AS
TP
CIV
DJI
NG
AB
OL
NIC
HN
DB
GD
CP
VZ
MB
SL
VIN
DL
SO
BT
NK
SV
LK
AM
AR
AR
MM
DA
GE
OU
KR
B40 T60
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
AG
O
IRQ
GA
B
BW
A
JO
R
PA
N
PR
Y
DO
M
ME
X
ZA
F
CO
L
EC
U
PE
R
TU
R
BR
A
CR
I
TU
N
AL
B
MN
E
MU
S
BL
R
BIH
RO
M
BG
RB40 T60
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
ISL
SW
EU
RY
NO
RA
RG
SY
CN
LD
DN
KF
INF
RA
IRL
CH
LG
BR
BE
LC
HE
LU
XA
UT
ML
TD
EU
CZ
EIT
AH
RV
CY
PS
VN
HU
NE
SP
LT
UR
US
PR
TP
OL
ES
TL
VA
SV
KG
RC
B40 T60
a. Low-income countries b. Lower-middle-income countries
c. Upper-middle-income countries d. High-income countries
Child
-de
pend
ency r
atio
Child
-de
pend
ency r
atio
Labor income still supports substantial consumption for 65-year olds,
while 75-year-olds rely mostly on public transfers or asset-based flows
14
-0.5 0 0.5 1 1.5
ArgentinaIndia
IndonesiaMexico
PeruPhilippines
South AfricaBrazilChile
ChinaCosta Rica
ThailandUruguay
GermanyHungary
JapanSlovenia
Korea, Rep.Spain
SwedenTaiwan (China)
USA
Share of consumption at age 65
Labor income Private transfers Public transfers Asset-based flows
-0.5 0 0.5 1 1.5
ArgentinaIndia
IndonesiaMexico
PeruPhilippines
South AfricaBrazilChile
ChinaCosta Rica
ThailandUruguay
GermanyHungary
JapanSlovenia
Korea, Rep.Spain
SwedenTaiwan (China)
USA
Share of consumption at age 75
a. Age 65 b. Age 75
Making the most out of demographic change
15
0.8 0.5
-0.2 -0.6 -0.3
-1
0
1
2
3
4
5
Pre-dividend Early-dividend Late-dividend Post-dividend World
Other sources ofgrowth
Net impact ofdemographicchange
2.8
3.2
4.2
1.62.1
0
10
20
30
40
50
Pre-dividend Early-dividend World
2015 2030 WB target
Average GDP per capita (annualized) growth over
2015-2030, percentage points
Global poverty will likely be concentrated
in Pre-dividend countries
Ave
rag
e G
DP
pe
r ca
pita
(a
nn
ua
lize
d)
gro
wth
, 2
01
5–3
0 (
pe
rce
nta
ge
po
ints
)
Povert
y r
ate
at $1.2
5 a
day (
%)
Thank You
Global Monitoring Report 2015/2015
www.worldbank.org/gmr
Questions or comments?
S. Amer Ahmed ([email protected]) &
Marcio Cruz ([email protected])
16