A New Model for Projecting the Demographic Dividend

Bernice Kuang, Futures Group
Scott Moreland, Futures Group
Elizabeth Leahy-Madsen, Futures Group
Matthew Hamilton, Futures Group

In developing countries, the growing potential to reap faster economic growth through a demographic dividend has consolidated interest in population issues among policymakers across sectors. This study aims to develop an empirically sound projection model that can be applied in high-fertility countries to explore the economic and social policies needed to turn a demographic opportunity into a demographic dividend as measured by changes in income per capita and employment. Using cross-national data from standard sources, the USAID-funded Health Policy Project developed a model that allows for feedback between demographic changes and the economy. Econometric equations were estimated for investment, employment, and GDP per capita using various predictors, including policy variables such as health, education, infrastructure, and macro-economic environment. This accessible but rigorous evidence-based modeling tool will inform high-level policymakers of the potential benefits of the demographic dividend, generating support for investments in the multi-sectoral policies required to achieve those benefits.