Capturing the Demographic Dividend

As world population quickly approaches the seven billion mark, examining the emerging challenges, opportunities, and implications of a growing youth population remains more pertinent than ever. The rising concentration of youth in developing countries and the possibility of a fall in birth rates indicates that many developing countries could face bulges in the number of youth seeking work. Countries must act in timely fashion to provide opportunities for youth.
For the purposes of this article, let’s consider youth as those below the age of 25. Greater than ever before, the youth segment of global population now outnumbers those aged 60 and above by 54%. Total, those under 25 account for 43% of the word’s population. What’s more, most of this growth in youth has been concentrated in developing countries, while the populations of Japan and European countries have consistently shrunk in recent years. Thus, not only are youth increasingly large stakeholders globally, they are also concentrated within already contending with the problems of development. The demographic concentration of youth in developing countries poses a few implications.
Historically, higher fertility rates have allowed for economic development. Exponential and economic growth went hand in hand. Economic growth was especially likely when fertility rates dropped. With fewer babies being born, an expanded workforce was unhampered by the need to produce for youth too young to be employed. Such a period was called a “demographic dividend.” Pay-offs of the dividend include more investment into “physical capital, job training, technological progress, and stronger institutions” instead of children. Savings also accumulate with fewer children. Such changes have led to economic growth among many developed countries. Given the current demographic state of many developing countries, the growth of the youth demographic may yield dividends and outstanding growth potential.
However, population size does not determine economic growth. The leaders and institutions in countries have substantial roles to play and substantial obstacles to overcome if they intend translate their population growth into economic growth. In order to take advantage of the demographic dividend, a conducive policy environment focusing on youth empowerment is necessary. Such an environment takes root in effective investments in health, education, and training that promote a broad distribution of the benefits of economic growth. Guaranteeing these conditions is an especially arduous task for developing countries. A large contributor to this difficulty is the dwindling supply of natural resources in the developing world, as well  as water and energy shortages, which will pose challenges to development and providing jobs for youth.
To demonstrate the difficulties of empowering a huge populace, look at India. The population of India under 25 alone constitutes 1/14 of the world’s population. Over 600 million people in India within this bubble are either now or will be soon be loo

king for jobs. The problem is that many of the 90 million currently looking to enter the workforce lack the requisite “skills and mindset for productive employment.” While India enrolls half the global average of students in tertiary institutions, the government only spends two to three percent of the GDP on education.  Though a few institutions in India provide world-class instruction, the historical pattern of these graduates moving abroad and the dearth of research universities in India means the country gets little return on its gr
aduates. Given the huge youth bulge, the government must act quickly to provide opportunities or else it will miss out on the benefits of a better-educated youth population. The consequences of such a brain drain abroad and a lack of opportunities at home are quite substantial.
For an example of these consequences, take the Arab Spring. According to some, the Arab Spring may have been caused by the large, young, unemployed male population. Scholars have wondered whether pent up frustration at the lack of job creation may have led to demonstration like those in Tahrir Square and the subsequent overthrow of Middle East governments. Indeed, when opportunities for youth are lacking, unsatisfied youth have the potential to become a most destabilizing force.
However, there is hope for the developing world. The spread of birth control may cause widespread periods of demographic dividends as countries move toward a greater concentration of resources within families of fewer children. Still, the governments of developing countries must prepare for the bulge in the eligible workforce immediately. If they fail to do so, underpowered youth may reverse progress made in the developing world and delay the achievement of the Millennium Development Goals even further.
 
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