Glamor Economics

Chapter 184

Chapter 23 Section 3 The Golden Age of Economic Development - Demographic Dividend

The so-called demographic dividend in economics means that a country's working-age population accounts for a relatively large proportion of the total population, and the dependency ratio is relatively low, which creates favorable demographic conditions for economic development. The entire country's economy shows high savings, high investment and high growth situation.

China's current population age structure is in the stage of demographic dividend. The total labor force supplied each year is about 1000 million, and the proportion of labor population is relatively high, which ensures the demand for labor force in economic growth.Since the peak of population aging has not yet arrived, the burden of social security expenditure is light, and the speed of wealth accumulation is relatively fast.

Strictly speaking, any country that has completed its demographic transition will experience a lipstick dividend.Many newly industrialized countries, especially East Asian countries, have completed the demographic transition process in only a few decades because of the relatively short history of population transition, which took the developed countries hundreds of years to complete. A very strong correlation has been established, and more and more people have begun to pay attention to the dividend effect of demographic transition on economic growth.

Japan is the first country in Asia to realize demographic transition and economic take-off, and the demographic dividend also appeared the earliest, starting from about 1930 to 1935 and ending from 1990 to 1995, which lasted for about 60 years.Other Asian countries and regions, including China, South Korea, Singapore, Hong Kong, Thailand, Malaysia, Indonesia, the Philippines, and Vietnam, appeared almost 30 years after Japan's demographic dividend.

Does the demographic dividend necessarily bring about economic growth?Observing the above-mentioned countries in the demographic dividend period, it is not difficult to find that there are huge differences in the level of economic development among these countries.The richest country, such as Singapore, has a per capita GDP of more than US$3, while the poorest country, Vietnam, has a per capita GDP of just over US$2005 in 600.The different results of economic growth caused by the same demographic dividend period mean that the demographic dividend does not necessarily lead to economic growth.

In fact, the demographic dividend is more like an opportunity. Only by seizing this opportunity and making good use of it can the opportunity be turned into a dividend.In this sense, the demographic dividend is just a favorable condition for economic growth—the labor resources are very abundant in a certain period of time.Whether this favorable condition or advantage can be transformed into real economic results depends on whether labor resources can be fully utilized.

[links to related words]

社会总抚养比　是社会人口红利的表现形式。社会总抚养比＝（0-14岁人口数＋65岁以上人口数）/15-64岁劳动年龄人口数。总抚养比越低，人口红利越高。

The population debt corresponds to the demographic dividend. The population debt refers to the cost of population development that has been paid in advance and will be repaid in the future.In the first stage of population transition, the trend of population rejuvenation tends to occur, with rapid growth of children and adolescents, while the growth of the elderly population is slow. As a result, the total social dependency ratio, mainly the dependency ratio of children, will rise rapidly, and economic growth will be greatly affected.Subsequently, the proportion of child support will gradually decrease, the pension problem will gradually increase, the proportion of the total working population will change, and economic growth will slow down accordingly.At this time, the so-called "population debt" is formed.

(End of this chapter)