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Demographic transition in sub-Saharan Africa: how big will the economic dividend be?

Authors
  • Eastwood, Robert
  • Lipton, Michael
Type
Published Article
Journal
Population studies
Publication Date
Mar 01, 2011
Volume
65
Issue
1
Pages
9–35
Identifiers
DOI: 10.1080/00324728.2010.547946
PMID: 21337257
Source
Medline
License
Unknown

Abstract

In mid-demographic-transition, many Asian countries enjoyed a large demographic 'dividend': extra economic growth owing to falling dependant/workforce ratios, or slower natural increase, or both. We estimate the dividend, 1985-2025, in sub-Saharan Africa and its populous countries. Dependency and natural increase peaked around 1985, 20 years after Asia. The UN projects an acceleration of the subsequent slow falls but disregards slowish declines in young-age mortality and thus, we argue, overestimates future fertility decline. Even if one accepts their projection, arithmetical and econometric evidence suggests an annual, if not total, dividend well below Asia's. The dividend arises more from falling dependency than reduced natural increase, and could be increased by accelerating the fertility decline (e.g., by reducing young-age mortality) or by employing a larger workforce productively. Any dividend from transition apart, low saving in much of Africa (unlike Asia) means that, given likely natural increase, current consumption per person is unsustainable because it depletes capital per person.

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