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GTAP Resource #4966

"Capitalizing on the Demographic Dividend in Asia-Pacific"
by Mirza, Tasneem, Thangavel Palanivel and Andrew Mason

Asia-Pacific is undergoing a historic moment of demographic change where working-age population is increasing rapidly. In 2016 the region will be reaching 3 billion people aged 15-64. The share of children and old-age dependency just fell to its minimum of 32% and the share of working-age population rose to its maximum of 68%. Falling fertility rates and improvements in health and medicine are the underlying impetus behind these changes. Because most countries in the region have not aged yet, this presents a unique moment in history where the region enjoys its maximum share of economically-productive population, and therefore an opportunity to accelerate development.

The changes in population age-composition have several implications for the economy, households, and individuals. At the economy level it means, as labor supply increases there is opportunity to step up growth. Secondly, as the number of dependents fall, savings will increase save which can in turn lead to increased investments and capital deepening. Thirdly, with more employable population the tax base will widen, while government expenditures on child support and old-age healthcare will fall, increasing flexibility for the government budget. If countries are able to build on these direct and indirect effects then income and expenditures will increase, stimulating economies, and enabling countries to carve an improved path for development.

To measure the impacts of population changes on economic growth, referred to as the demographic dividend, a simple growth model is used based on Mason (2015). The model measures two types of demographic dividends: the first which occurs when the relative labour supply increases, and the second that unfolds when the population is also more productive. The model builds on historic analysis of global demographic dividends, and projects growth impacts for Asia-Pacific and its subregions up to the year 2050.

Resource Details (Export Citation) GTAP Keywords
Category: 2016 Conference Paper
Status: Published
By/In: Presented at the 19th Annual Conference on Global Economic Analysis, Washington DC, USA
Date: 2016
Created: Mirza, T. (4/14/2016)
Updated: Mirza, T. (5/13/2016)
Visits: 2,103
- Demographics
- Economic development
- Economic growth
- Education
- Health
- Labor market issues
- Migration
- Asia (East)
- Asia (South-Central)
- Asia (Southeast)

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