Demographic Dividend? No, It is Education Dividend

24 May 2017

Dear readers,

The word “demographic dividend” has been used frequently in Indonesia, especially when we examine relationship between population change and economic development. The main argument of the concept is that falling fertility has reduced young dependency ratio (“burden” from population under 14 years old), and rising number of “productive” working age population (15-64 years old). The concept further argues that the rising number is favourable for economic growth.

However,  Lutz (2015) showed that the concept of “demographic dividend” omitted an important intermediate variable — education. Declining fertility is not automatically transformed into rising productivity. To make the falling young dependency ratio favourable to economic growth, rising education, especially female education, should have increased accompanying the  decline in the young dependency ratio. Therefore, Lutz argued that we should talk about Education Dividend, rather than Demographic Dividend.

You may click here to read the article by Lutz on world population and human capital.

Further studies should be made on the current status of human capital of population aged 15-64 years old. How productive are they? Are population 15-24 already productive, or still in school? How is the health of the population? Is there any available employment opportunities for them?

If the status of human capital is low, the relative large number of population aged 15-64 can be disaster rather than a dividend. With low education, low productivity, and lack of employment opportunities, these young people can be exploited as a source of social and political instability.

Best regards,

Aris Ananta

Filed under: Demography, publications, statistics, human capital, Population Projection, social and political instability

A Critique to UN Population Projection

24 May 2017

Dear readers,

One of the most important ingredients in making population is the assumptions on what will happen to the fertility, mortality, and migration in the future.  To do so, some demographers analyze time series data (data in the past) and extrapolate it to the future. This is the way that the UN population projection was prepared, argued Abel, Barakat, KC, and Lutz (2016).

Yet, they argued that the future will be different from the past. They do not agree with the extrapolation method.   To make the assumptions, they collect expert opinion on what may happen in the future, especially with regards to the implementation of Sustainable Development Program. They insert “education” as the new variable in their population projection.

With their projection, the world population will reach its peak at around 2060 and will reach between 8.2 – 8.7 billion in 2010. This is much lower than the UN projection at between 9.5 billion and 13.0 billion in 2010. Projected increase in education, and the resulting decrease in fertility and mortality, will make the world population reaching its peak much earlier.

This paper is important for those who are preparing population projection as well as those who try to use results of population projection. Please click here.

Enjoy reading the article.

Aris Ananta

Filed under: Demography, English, statistics, Population Projection, UN