'Demographic Dividend' Concept? - Population and Development ...

A Publication of the Population and Development Program at Hampshire College • No. 44 • Spring 2007What’s Wrong with the ‘Demographic Dividend’ Concept?by Anne HendrixsonThe September 2006 issue of the InternationalMonetary Fund’s Finance & Development, titled“6.5 Billion and Counting” depicts a bemusedcartoon earth, overflowing with people. The earth’sforehead is creased with concern as it strains tosupport surplus population in its hands, but despite itsbest efforts, people are slipping through its fingers andfalling into space.Finance & Development’s earth graphic isunfortunately typical of negative population tropes thattend to ignore or diminish the complex interplay ofpolitics, economics, and other factors that contribute toglobal problems, while overemphasizing the role ofpopulation. 1 Even as population growth rates declinefaster than expected, many such images and narrativescontinue to characterize population growth asoverwhelming the earth. 2While the Finance & Development cover graphicconveys alarmist ideas about population, themagazine’s content seems to depart from thatalarmism. It features articles that look at somepopulation characteristics as potentially beneficial tocountries’ economic growth and poverty reduction. Inparticular, the magazine explores how fertility rate, agedistribution, life expectancy, migration andurbanization affect economic growth. 3 One of its focalpoints is the “demographic dividend” concept.The latter describes an economic boom that ispurportedly catalyzed by a population boom. Harvardeconomist and demographer David Bloom, one of thelead architects of the concept, explains that when thenumber of working age adults in a population is largerthan the number of dependent seniors and children,there is a “window of opportunity” wherein the adults’productivity and consumption levels can rise and theeconomy can benefit. 4 The term “demographicdividend” has come to refer to the working agepopulation, rather than the economic boom. 5The champions of this concept conjecture that thedemographic dividend occurs as part of what manyconsider an archetypal demographic transition.“Demographic transition” begins when mortality ratesfall and birth rates remain the same. During thistransition there is a boom in the population, typicallyfollowed by a lowering of birth rates. As birth ratesdecrease and the population boom ages and enters theworkforce, it can result in the demographic dividend.The demographic dividend concept recommends“catalyzing” demographic transition to help bring onthis age distribution within a population. 6Some champions of the concept credit the demographicdividend with the potential to strengthen flaggingnational economies, particularly in the global South.Many point to the so-called East Asian economic“miracle” as evidence of demographic dividendactivity. 7 Conversely, concept adherents contend thatLatin American governments failed to capitalize ontheir demographic dividend, and have remained in astate of economic stagnation.Often pointing to the example of Latin America, Bloomand others emphasize that the presence of a demographicdividend does not guarantee economic growth. Theyargue that countries experiencing a boom must “exploit”that burgeoning population as workers to stimulate theeconomy. Proponents of the demographic dividendconcept argue that in order to transform the youngpopulation into productive workers and consumers,national governments must support them with adequateeducation, health benefits (including family planning),and neo-liberal economic policies to ensure a strong jobmarket. Furthermore, governments must plan for futurepensions for the dividend as it ages. 8Within this framework, family planning is particularlyimportant to spurring economic growth. Theargument is that family planning will hastendemographic transition, simultaneously lowering thenumber of children and infants, and freeing workersfrom private sphere responsibilities for work in theformal market. It is in the family planning andpopulation policy arena that the concept has foundparticular traction and support.

The Making of a TheoryIn November 1998, select economists and policyanalysts concerned with re-envisioning the relationshipbetween population and economic growth attended theSymposium on Population Change and EconomicDevelopment in Bellagio, Italy. 9 Participants discussedwhether it is possible to form an economic rationalethat would bolster political and financial support forthe family planning, education, and women’sempowerment mandates of the 1994 InternationalConference on Population and Development’s (ICPD)Program of Action.The meeting resulted in the influential book,Population Matters: Demographic Change, EconomicGrowth, and Poverty in the Developing World. Thebook argues that population can have a positive effecton economic growth and advocates for “speedingdemographic transition” to create this positive effect.It sparked further interest in an economic rationale forfamily planning, particularly in the funding world.Population Matters inspired the John T. and KatherineD. MacArthur Foundation’s Population andReproductive Health staff to hold a series of meetingswith feminists, economists and demographers aboutthe validity of the concept. Although some of thereproductive health advocates at the meetingsquestioned the usefulness of the concept, program staffdecided to invest in further research.So far, the MacArthur Foundation has invested about$1 million from its emerging issues portfolio intoresearch on the demographic dividend concept. 10 Manyof the Symposium meeting participants receivedfunding, including David Bloom and Andrew Mason ofthe East/West Center. Ann Blanc, MacArthurFoundation Program Officer in Population andReproductive Health, explains that the foundation hassupported research into the demographic dividendbecause it may prove a valid economic rationale foroperationalizing the family planning and reproductivehealth initiatives from the ICPD+10 Program ofAction. 11The Population and Development ProgramCLPP • Hampshire College • Amherst • MA 01002413.559.5506 • http://popdev.hampshire.eduOpinions expressed in this publication are those ofthe individual authors unless otherwise specified.Foundation support for demographic dividendresearch, mainly in the U.S. and Britain, hasstrengthened existing partnerships between researchers,foundations and the United Nations Fund forPopulation Activities (UNFPA), IMF and otherorganizations. These networks have helped to spreadthe concept. Meanwhile, development agencies andNGOs have adopted it to promote family planning,reproductive health, education and women’sempowerment as advocated in the ICPD and ICPD +10Program of Action, and the UN MillenniumDevelopment Goals.Economic Boon to Violent DoomThe World Health Organization, the United Nations,and the UNFPA are among the internationaldevelopment agencies that use the demographicdividend concept in their literature and presentations.For instance, the UNFPA mobilizes the concept in their2005 handbook “The Case for Investing in YoungPeople.” The handbook directs UNFPA staff toleverage the concept to convince policymakers toallocate resources to young people in developingcountries. The handbook suggests that UNFPA staffdiscuss the long and short-term economic benefits ofsupporting young people, including “capitalizing onthe demographic transition.” 12Interestingly, the handbook also evokes anotherpopulation hypothesis, the “youth bulge” concept, tostress the potentially negative outcomes of ignoringyoung peoples’ needs. In the authors’ words, the threatof the youth bulge is the most “emotive argument” tosubmit to policy makers. 13 The “youth bulge” conceptpredicts that more than twenty percent of youngpeople in a population can signal political rebellionand unrest. The concept sees young men as potentialperpetrators of violence, particularly in the globalSouth. 16 The UNFPA’s message is this: the presumablypeaceful and productive demographic dividend might,if not properly supported, turn into a violent andunruly youth bulge and threaten nations’ security.Other non-governmental, policy advocacy organizationsmobilize the demographic dividend concept. US-basedPopulation Action International (PAI) makes a similarlink between the demographic dividend and the youthbulge in The Security Demographic, a publicationaimed at policymakers and analysts concerned with U.S.national defense. “Viewed from countries where mostyoung adults… have been educated or technicallytrained, and where their energy and ingenuity aresought by employers, such a large proportion of youngpeople—a side effect of past population growth calledthe youth bulge—is seen as an asset.” 17 The authorscontend that the youth bulge, when unsupported, posesa danger to national security. The authors cite both the—2—

demographic dividend and youth bulge concepts asevidence of the need for increased family planningprograms in the global South.The UNFPA handbook and The Security Demographicare examples of publications that elevate thedemographic dividend (and youth bulge) concepts tocommon sense truths. 16 With frequent use, theconcepts have moved from research topics to de factopolicy rationales. In the process they have gainedascendancy over other demographic theories despitethe fact that feminist reproductive health activists,economists and others have questioned the concept anddeveloped important critiques.Critiques of the Demographic DividendFeminist Sonia Correa notes that the demographicdividend concept is not unique, or particularly new. 17Demographers and economists throughout the worldhave theorized about the demographic “window ofopportunity,” particularly in Brazil. However, thedemographic dividend language has started to prevailin global debates and the 1990s window ofopportunity formula is losing ground. 18 This isunfortunate because the latter terminology is moreaccurate as it suggests that demographic change createsan opportunity that may or may not be positively used.In contrast, the demographic dividend conceptinscribes an inherent value to working age populationseven as concept proponents caution that dividendbenefits are not automatic. By valuing working-agepopulations because of their numbers rather than othercharacteristics, the concept tends to universalizepopulation trends, rather than examine them in theircontext. Just as the concept relies on the debated“demographic transition” theory to explain globalpopulation change through a universal, Europeanbasednorm, the concept promotes a template forunderstanding and exploiting working-age populations,based on the supposed demographic dividend successesin East Asia.However, the conditions and factors that explain theEast Asian economic “miracle” cannot be replicatedelsewhere. The particular context that contributed tothe “miracle,” including the national regime, politicalcontext, and relationship to the global market and theU.S., among other factors, does not exist everywhere.That particular economic surge in East Asia cannot berepeated, even in East Asia.While the national, political and social context of theworking age population matters, so does thecomposition of the population. Working agepopulations’ characteristics differ from location tolocation. The demographic dividend concept viewsthem as heterogeneous blocks. It assumes that alleconomic classes, ethnic groups and races within apopulation go through demographic transition at thesame time, whereas often demographic transitionoccurs at different rhythms and paces for differentsectors of the population. This tendency to generalizeabout working-age populations weakens an alreadysimplistic concept.An Effective Rationale for Sexual andReproductive Health?Correa sees the demographic dividend theory as arisingfrom the need for family planning champions to rallysupport in a context of increased U.S. restrictions onreproductive health. As the Bush Administration pullsfederal funding for domestic and international familyplanning, advocates are looking for an argument that willfunction successfully in this conservative political arena.The question is whether the demographic dividendconcept’s numbers-based arguments will support thekind of voluntary, comprehensive, quality sexual andreproductive health and rights programs advocated bywomen’s health activists at the ICPD and elsewhere. 19The prospect is unlikely. Such quality programs buildfrom users’ rights and participation and offeraffordable health care for women and families. Theyare organized from a rights-based perspective whichrespects each individual’s sexual and reproductivehealth decisions.The demographic dividend concept tends to obscure orde-emphasize this rights-based approach. Instead, theconcept advocates for an approach driven by thepotential for economic growth. It mobilizes familyplanning as a means to achieve an economic end,rather than to promote information on and access tocontraceptive methods as a fundamental human rightof both women and men, and particularly youngpeople. The suggestion that nations will benefit fromcatalyzing demographic transition may unexpectedlyrevive old models of fertility control measures to thedetriment of sound sexual reproductive health andrights policies, as recommended by ICPD and byfeminist reproductive health groups around the world.Correa notes that while concept proponents do notexplicitly call for population control, their argument“may trigger initiative in that direction. I suspect thismay be happening already.”Ultimately, the “demographic dividend” conceptexhibits some of the same schizophrenia as theSeptember 2006 Finance & Development’s cover andits content. While it promotes a more nuanced look atthe relationship between population and economicdevelopment, it relies on numbers to validate thenecessity of family planning.—3—

Likewise, those who promote the concept to attractresources and support for family planning, while wellintentioned,draw away much-needed attention andfunding from a rights-based approach to sexual andreproductive health. This support would be betterallocated to promoting existing feminist efforts forenvisioning and providing quality sexual andreproductive health services. And, while it may bepolitically expedient to back an economic appeal forfamily planning during the conservative Bush regime,this approach could (as suggested above) underminethe services it aims to support. The provision of goodqualitysexual and reproductive health services shouldbe a goal unto itself, not a means to achieve economicgrowth.Anne Hendrixson is a graduate student in the International Development, Community and Environment Programat Clark University. She is on the advisory board of the Committee on Women, Population and the Environment.*Many thanks to Sonia Correa for a long conversation which informed this article. Correa is the founder of SOS-Corpo- Instituto Feministapara a Democracia (Brazil). She is the coordinator for sexual and reproductive health rights of DAWN, Development Alternative with Womenfor a New Era, a southern-based research and activist network.References1. For a detailed discussion of overpopulation narratives and the processes that they obscure and emphasize, see Jael Silliman and YnestraKing, eds, Dangerous Intersections (Boston, MA: South End Press, 1999).2. See Population and Development Program at Hampshire College, “10 Reasons to Rethink ‘Overpopulation,’” DifferenTakes, No 40, Fall2006, http://popdev.hampshire.edu/projects/dt/pdfs/DifferenTakes_40.pdf.3. David E. Bloom and David Canning, “Boom, Busts, and Echoes,” Finance & Development, Vol. 43, No. 3 (September 2006),http://www.imf.org/external/pubs/ft/fandd/2006/09/bloom.htm.4. David Bloom, David Canning, and Jaypee Sevilla, The Demographic Dividend: A New Perspective on the Economic Consequences ofPopulation Change, (Santa Monica, CA: RAND, 2003), xi.5. Other demographers describe the demographic dividend as creating two bonuses: one during workers’ prime productive years and theother during workers’ retirement.6. RAND, “Banking the ‘Demographic Dividend: How Population Dynamics Can Affect Economic Growth,” Population Matters PolicyBrief, 2002, pp.2-3.7. See David Bloom, David Canning and Pia N. Malaney, May 1999, “Demographic Change and Economic Growth in Asia,” CID WorkingPaper No. 15, Harvard University.8. Bloom, Canning, and Sevilla, The Demographic Dividend.9. The Bellagio meeting was funded by the Rockefeller and Packard Foundations in cooperation with the UNFPA.10. The Hewlett Foundation funded David Bloom and colleagues’ The Demographic Dividend, which also received support from the Davidand Lucille Packard Foundation, Rockefeller Foundation and UNFPA.11. Interview with Ann Blanc, September 2006.12. UNFPA, The Case for Investing in Young People as part of a National Poverty Reduction Strategy, (UNFPA, 2005), p.26.13. Ibid, 28.14. See Anne Hendrixson, “The Youth Bulge Concept: Defining the Next Generation of Young Men as a Threat to the Future,”DifferenTakes, No 19, Spring 2002, http://popdev.hampshire.edu/projects/dt/pdfs/DifferenTakes_19.pdf.15. Richard P. Cincotta, Robert Engelman, and Daniele Anastasion, The Security Demographic: Population and Civil Conflict After the ColdWar (Washington, D.C.: Population International, 2003), p. 42.16. Interestingly, the “youth bulge” has taken on multiple meanings. While it is most often used to describe the potentially violent populationof young men in the global South, it is also employed as a neutral term to refer to size of the youth population. For instance, seeEmmanuel Y. Jimenez and Mamta Murthi, “Investing in the Youth Bulge,” Finance and Development Vol. 43, No. 3, September 2006.17. Interview with Sonia Correa, September 25, 2006.18. According to Correa, a landmark reference is the paper by the demographers José Alberto de Carvalho Carvalho and Laura RodriguesWong: “Demographic and Socioeconomic implications of Rapid Fertility decline in Brazil: A window of opportunity” in G. Martine, M.Das Gupta, and L. C. Chen, eds., Reproductive Change in India and Brazil (Oxford University Press, 1998) 208-240. The two authorshave recently re-visited the theme in a paper presented at the 2005 IUSSP Conference in Tours, France: “Demographic bonuses andchallenges of the age structural transition in Brazil,” which can be assessed athttp://www.abep.nepo.unicamp.br/docs/PopPobreza/Wong.pdf.19. While merits of the “rights-based” approach are debated within the feminist sexual and reproductive health movement, that is aconversation for another paper.—4—