Human Development Report 2013 - UNDP

ut in very different ways. Some poorer countrieswill benefit from a demographic dividendas the share of the population in the workforcerises. 37 Richer regions of the South, however,will confront the challenge of rising dependencyratios, with ageing populations and fullschool enrolment mirrored by a decline in thenumber of people earning incomes.In the long term, both demographic challengescan be mitigated by raising educationalachievement. First, education acceleratesreductions in fertility rates where they arestill high. Second, education can boost labourproductivity in richer countries with smallerworkforces. At the same time, governmentswill need to foster job creation more actively toexpand opportunities for productive employmentfor younger and older workers alike.The failure of economic opportunity andproductivity to keep pace with these demographicchanges can not only keep countriesfrom benefiting from the demographic dividend,it can also threaten social stability, asseen in many countries in recent years.Modelling demographyand educationDemographic trends are not deterministic,however. They can be influenced, at least indirectly,by education policies and sometimes bymigration policies. 38 Effective policy optionscan be identified by modelling demographicand education trends. 39 Two scenarios for2010–2050 illustrate the impact of differentpolicy responses: the base case scenario, inwhich enrolment ratios remain constant ateach level of education, and a fast track scenario,in which countries with the lowest initialeducation levels embrace ambitious educationtargets. 40The dependency ratio is an increasinglycritical concern. A high dependency ratio canimpoverish a country and lead to reversals inhuman development. The base case scenarioprojects a 9.7 percentage point decline in thedependency ratio over 2010–2050 for lowHDI countries, a 9 percentage point increasefor medium HDI countries, a 15.2 percentagepoint increase for high HDI countries and a28.7 percentage point increase for very highHDI countries (figure 4.5). Under the fasttrack scenario, the dependency ratio for lowHDI countries drops 21.1 percentage pointsover 2010–2050, more than twice the decreaseunder the base case scenario. The dependencyratio rises more slowly under the fast trackscenario than under the base case scenario formedium HDI countries (6.1 percentage points)and high HDI countries (4.9 percentagepoints); however, this rise is less pronouncedfor very high HDI countries.Under the base case scenario, the share ofthe elderly in the population rises for all HDIgroups: 3.9 percentage points for low HDIcountries, 17.7 percentage points for mediumHDI countries, 20.2 percentage points for highHDI countries and 22.3 percentage points forvery high HDI countries. 41 Over 2010–2050,the share of the young population is projectedto fall in all HDI groups. For low HDIcountries, the dependency ratio will decreasebecause the decline in the share of the youngpopulation is greater than the rise in the shareof the elderly population.In the Arab States, South Asia and Sub-Saharan Africa, the dependency ratio is projectedto decline under the base case scenarioand even faster under the fast track scenario. InSub-Saharan Africa, for example, the dependencyratio falls 11.8 percentage points underthe base case scenario and 25.7 percentagepoints under the fast track scenario.In East Asia and the Pacific, Europe andCentral Asia, and Latin America and theCaribbean, the dependency ratio is projectedto increase. East Asia and the Pacific will see astriking increase in the share of the elderly—up25.8 percentage points, which is an even greaterrise than in very high HDI countries.Brazil and Chile demonstrate the potentialfor ambitious education policies to alter dependencyratios. In Brazil, the dependency ratiorises 15.6 percentage points under the basecase scenario but only 10.8 percentage pointsunder the fast track scenario (table 4.4). Chilewould see a similar increase, 20.2 percentagepoints and 17.3 percentage points.The challenges differ considerably by countryunder the two scenarios. Under the base casescenario, China would experience a more rapidincrease (27.3 percentage points) than, say,Thailand (23.9 percentage points) or IndonesiaDemographic trendsare not deterministic.They can be influencedby education policiesand sometimes bymigration policiesChapter 4 Sustaining momentum | 97