What is the demographic dividend?

The demographic dividend refers to the economic growth potential that can result from shifts in a population's age structure, particularly when there is a higher proportion of working-age individuals compared to dependents (children and the elderly). This phenomenon occurs when fertility rates decline, leading to a smaller proportion of young dependents and a larger segment of the population being of working age.

With a greater number of individuals able to participate in the labor force, there is increased productivity and economic output. This can lead to improved economic growth as more people are contributing to economic activities, earning wages, and paying taxes, creating a virtuous cycle of investment and development.

As the working-age population grows, it can also provide opportunities for savings and investments, further boosting economic growth. The demographic dividend is considered a crucial factor in achieving sustainable development if the appropriate social and economic frameworks are in place to effectively harness this potential.