Demographic Transition

Paper Summary:

This paper explains that, from the beginning of 21st century, the Demographic Transition Model, which uses population age structure, has become a more important factor than the traditional use of total population. The author points out that demographic transitions have significant impact on the age-distribution of the populations of the countries. Four ratios are important to this measurement: (i) Child Dependency Ratio; (ii) Old Dependency Ratio; (iii) Overall Dependency ratio and (iv) Ratio of Working Age Population to non-working-age population (between 15 & 64 years of age). The paper states that the quality of the working age population is more important than the sheer numbers; hence, without substantial achievement in the areas of health and education, the quality of the working-age population may decline and consequently, the growth will be adversely affected despite having larger proportion of working age population. Many Charts and Tables.

Table of Contents
Introduction
Demographic Transition Model
Population Neutralism
Mortality Rates
Fertility Rates
Population Rise
Demographic Dividend
Dependency Ratios
Dependency Ratios in Japan
Dependency Ratios in China
Dependency Ratios in India
Dependency Ratios in Africa
Economic Impacts of Demographic Changes and vice versa
Base-Level Position of Population, Rate of Fertility and Mortality
Education
Openness of the Economy
Other factors
Policy Environment

From the Paper:

"By shifting the age-structure of a population, a country's demographic transition can contribute to significant changes in its economy. Those changes occur because people's economic behavior -savings and investment- tends to vary predictably over their life-times . This is also called life-cycle theory model. Once age structure dynamics are introduced into an economic growth model, the countries obey the common principles of economic growth . These so called 'predictable ways' of shift in economic behavior have already been summarized in the beginning of the paper too (Page 3). Let us summarize the same. Let us assume that we have an economy that is growing at 2 or 3% per year. Let us call it the steady-state growth. The demographic burden transition creates a youth demographic burden initially. That baby boom drags down measured economic growth a bit, but when they reach the working-age, we have the accounting and behavioral effects-more savers and more workers and also higher labor force participation rates and more people earning to save because they think that they have to live longer. That leads to a bump in economic growth. But this bump abates when people reach older age."

More papers on Demographic Transition:

• Essay # 143836 : "Demographic Transition"
• Essay # 32498 : "The Demographic Transition Model"
• Analytical Essay # 40676 : "The Demographic Transition Model of Population History"

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