The Demographic Dividend in Africa
David Canning
Harvard Center for Population and Development Studies
Wilson Center, Washington DC
October 15th 2013 1
Policies for Fertility Decline Decrease Child Mortality
2 *World Development Indicator Data. 2010
Female Education Is a Major Diver of Fertility Rates
3
4
Male-Female Education Gap in Sub-Saharan Africa--Secondary Enrollment
Contraceptive Prevalence and the Total Fertility Rate and Sub Saharan Africa
5
2
3
4
5
6
7
8
0 10 20 30 40 50 60 70
TFR
CPR
Rural
Urban
Linear (Rural)
Linear (Urban)
Proximate Determinants of Fertility
6
A Family Planning Intervention Reduced Fertility in Navrongo, Ghana
Treatment Area:
Comparison Area
7 n
Economic Consequences The Demographic Dividend
• Working age share 30 – 50 year boost – Labor force per capita
• Youth Bulge – Underemployment, Agriculture/Unpaid
• Female Labor Force Participation – Only educated/urban women
• Savings - not yet in Africa but FDI • Child Health – birth timing/spacing effects • Education – move to higher levels
8
0
0.5
1
1.5
2
2.5
3
12-14 years 15-19 years 20-24 years 25-29 years(Reference)
30-34 years 35-39 years 40-44 years 45-49 years
Infant Mortality Adjusted RRR: Age of Mother at Birth
Short Birth Spacing Increases Infant Mortality
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
7-11months
12-17months
18-23months
24-29months
30-35months
36-47months
(ref)
48-59months
60-95months
>95months
Adjusted Relative Risk by Birth Interval
10
3% 3% 4%
0%
5%
10%
15%
20%
25%
30%
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
% o
f pop
ulat
ion
Source: World Bank: Health, Nutrition and Population Statistics
Elderly as Proportion of Population (1960-2050) International Comparison
WLD SSA SAS NAC MEA LCN EUU EAS
Aging in Sub-Saharan Africa? • In SSA, the elderly are projected to form 5% of the population by 2050
• The proportion has been stable at 3-4% and is likely to increase beyond 4% by 2030
• In comparison to other regions of the world, this proportion is the lowest
EUU, 28% EAS, 23% NAC, 22% LCN, 19% WLD, 16% MEA, 15% SAS, 13%
SSA, 5%
11
Increasing Youth Cohorts I Sub Saharan Africa
0
5
10
15
20
25
30
35
40
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
Year
ly C
ohor
t 15 -
24 (
Mill
ion)
Eastern Asia South-Central Asia Sub-Saharan Africa
12
Impact of 10% Increase in youth cohort size in SSA
Distribution of Work Percentage Point Change
Unpaid Work +13
Wage Employed -6
Self Employed -5
Sector of Work Percentage Point Change
Agriculture +8
Industry -2
Services -6
Labor Market Activity Percentage Point Change
Not in Labor market +13
Working -10
Unemployed -3
13
14
Household Savings Rates Vary with Age and Peak in Late Middle Age
-3
-2
-1
0
1
2
3
4
5
6
1961-1965 1966-1970 1971-1975 1976-1980 1981-1985 1986-1990 1991-1995 1996-2000 2001-2005 2006-2010
Figure 1. Annual Growth Rates (29 balanced countries): GDP & GDP per capita
GDP growth GDP per capita growth
Economic Growth in Sub-Saharan Africa
15
Where is capital coming from?
16
0.00
1.00
2.00
3.00
4.00
5.00
6.00
Net FDI inflows/GDP (%)
4
6
8
10
12
14
16
Domestic saving per GDP (%)
Nigeria TFR under Low Medium and High Fertility Scenarios
17
0
1
2
3
4
5
6
Key:
Nigeria Population under Different Fertility Scenarios
18
0
200
400
600
800
1,000
1,200
2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Key:
Nigeria GDP per Capita Under Different Fertility Scenarios
19
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 2085 2090 2095 2100
Key:
20
Goals Polices
Speed the Demographic Transition
To affect Fertility Child mortality, female education, social norms, family planning
Realizing the Labor Force Dividend
To absorb Youth Bulge FDI, domestic saving, human capital, migration (Agriculture and natural resources not sufficient)
To harness the 1st dividend
Improve educational attainment, move up value chain
Realizing the Savings Dividend
Harness the 2nd dividend Improve policies and institutions for domestic savings
21
Success
Failure
Africa undergoes rapid fertility transition
Slow fertility transition and persistent youth bulge
Human capital is harnessed and makes Africa the workbench of the world
Large scale underemployment of human resources
Positive feedback -demographic change and economic development
Political instability due to frustrated youth