SHAPING THE FUTURE HOW CHANGING DEMOGRAPHICS CAN POWER HUMAN DEVELOPMENT

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38 Having fewer dependents on working-age people encourages accelerated economic growth come at a hefty price, such as through health-endangering air pollution and the generation of greater amounts of waste. The Republic of Korea provides an example of managing demographic transition to advance human development. As the country’s birth rate declined in the mid-1960s, elementary school enrolment fell, which released funds. The Government invested these in improving the quality of education at higher levels to equip the growing working-age population with marketable skills, and fostered economic growth to create more jobs through strategic investments. Essentially, the Republic of Korea used its demographic window to educate its population, including women, and to integrate them successfully into the labour market, leading to rapid economic growth and higher standards of living across its population. Broadly speaking, to reap demographic dividends and transform these into greater human development, patterns of public investment need to respond to demographic changes. Countries with a very youthful population need to invest more in schools; those with a large working-age population need to create large numbers of decent jobs; and those with an extensive elderly population need to invest more in health, transportation and other public facilities, as well as old-age pension systems. TWO TYPES OF DIVIDENDS Demographic change offers two potential dividends, which can be significant. 47 The first demographic dividend occurs when fertility rates fall and the labour force grows more rapidly than the dependent population. This builds on a simple equation: more labour equals more economic output, assuming no major drag from unemployment or underemployment. A second demographic dividend unfolds as transition proceeds if the larger number of workers is also more productive. This comes about in part through investments in human capabilities, such as through health and education, that, for instance, allow people to do more skilled jobs. Over time, they can then earn more, save more and acquire more assets such as homes, land and businesses. Both demographic dividends can translate into economic and human development gains. They are roughly sequential, with the first lasting for three to five decades depending on the speed at which fertility declines. The second begins later, can be sustained for a longer period and may be larger. Some overlap may occur, and neither dividend is automatic, with demographic transition merely opening a window of opportunity. The first dividend declines as population ageing sets in, and links to economic growth then tend to diverge for the second dividend. High-income countries have experienced this, and soon many middle-income countries will do so as well. Expenditure on health care rises as infectious diseases retreat and chronic, degenerative non-communicable diseases dominate, for instance. The ability to manage changes like these rests largely on the shoulders of the workforce, and its capacity for productive work, backed by a sufficient supply of decent employment options. Even if the number of workers falls relative to the number of dependents, they may be much more productive than a larger, less educated workforce. 48 MEASURING IMPACTS OF DEMOGRAPHIC CHANGE Early thinking around the impacts of demographic transition focused heavily on the contributions of the demographic dividend to economic growth. As far back as 1958, a study of India and Mexico found high costs from large shares of young and old dependents in a given population. Savings rates for families with a large number of children were lower, and requirements for social spending on health, education and so on were great. Productive capital per person was more limited. The study suggested that declines in fertility, by lessening dependency burdens on working-age people, could free them for activities that promote economic growth. 49 In the last two decades, a number of studies have estimated demographic dividends. One covering the years from 1965 to 1990 suggested that 25 percent to 40 percent of East Asia’s economic miracle, defined as an increase in per capita income, could be attributed to demographic transition. 50 Another on China calculated that, from 1980 to 2000, changes in age structure
favouring a higher share of economically active adults accounted for 15 percent to 25 percent of growth in per capita output. 51 An analysis of India’s rapid growth since the 1980s attributed a substantial share to changes in the country’s age structure, and predicted this could continue adding about 2 percentage points per year to per capita GDP growth over the next two decades. 52 Globally, current estimates project that for every 1 percentage point increase in the working-age population, real per capita GDP growth rises between 0 and 1.1 percentage points, depending on the region. 53 The demographic dividend, like many economic variables, is measured through an accounting framework linked to gross domestic product (GDP). This includes much of paid employment and its contributions to the demographic dividend, but does not factor in the significant share of other kinds of work performed by people—namely, unpaid care work that typically takes place in homes as well as through volunteering. Despite the lack of measurement, unpaid work makes significant contributions to economic prospects and human well-being, as highlighted in the 2015 global Human Development Report. 54 It likely intersects with the potential size of the demographic dividend, underscoring the need for better measurement and more systematic analysis. In Agenda 2030, governments agreed to recognize and value unpaid care and domestic work, including through the provision of appropriate public services, infrastructure and social protection policies, and by promoting shared responsibility for it, since women and girls still perform a disproportionate amount. Progress will be measured through collecting stronger data on the proportion of time spent on unpaid domestic and care work by sex, age and location. FIGURE 1.15: Population age-composition is intrinsically linked with human development Countries with high fertility tend to have low Human Development Index scores STATISTICAL LINKS TO <strong>HUMAN</strong> <strong>DEVELOPMENT</strong> Income and economic growth comprise one aspect of human development, but similar relationships are apparent when tracking demographic shifts against the HDI. Countries with high fertility rates and high population growth tend to have low HDI rankings relative to those with Sources: Based on UNDP 2015a, UN DESA 2015a. 39
Page 1 and 2: ASIA-PACIFIC HUMAN DEVELOPMENT REPO
Page 3 and 4: ASIA-PACIFIC HUMAN DEVELOPMENT REPO
Page 5 and 6: FOREWORD We live in times of great
Page 7 and 8: ACKNOWLEDGEMENTS The Asia-Pacific H
Page 9 and 10: Table of Contents Foreword iii Pref
Page 11 and 12: 1.15 Population age-composition is
Page 13 and 14: Acronyms ADB Asian Development Bank
Page 15 and 16: Overview SHAPING THE FUTURE: HOW CH
Page 17 and 18: HUMAN DEVELOPMENT IN ASIA-PACIFIC:
Page 19 and 20: FIGURE 2: Wealthier countries tend
Page 21 and 22: a strong emphasis on protecting wor
Page 23 and 24: could provide job matching assistan
Page 25 and 26: Asia-Pacific leave the workforce at
Page 27 and 28: WHAT’S AHEAD IN THIS REPORT This
Page 29: Chapter 1 HOW CHANGING DEMOGRAPHICS
Page 32 and 33: sustainable, reaching everyone whil
Page 34 and 35: FIGURE 1.1: The Human Development I
Page 36 and 37: TABLE 1.1: Asia-Pacific still has l
Page 38 and 39: married couples to have children, a
Page 40 and 41: FIGURE 1.5: Population pyramids in
Page 42 and 43: FIGURE 1.8: The median age is high
Page 44 and 45: FIGURE 1.10: Disparities in fertili
Page 46 and 47: Improved overall human development
Page 48 and 49: TABLE 1.5: Countries in Asia-Pacifi
Page 50 and 51: “When relatively large generation
Page 54 and 55: 40 In developed Asia- Pacific, the
Page 56 and 57: TABLE 1.6: Demographic dividends fl
Page 58 and 59: 44
Page 61 and 62: 2. MORE PEOPLE AT WORK: THE FOUNDAT
Page 63 and 64: encouraged labour-intensive industr
Page 65 and 66: FIGURE 2.3: Peaks within subregions
Page 67 and 68: A DEMOGRAPHIC RETURN FOR HUMAN DEVE
Page 69 and 70: BOX 2.1: Women bear a larger burden
Page 71 and 72: FIGURE 2.8: Growth in labour produc
Page 73 and 74: WHAT’S BEEN LEARNED IN CHINA, JAP
Page 75 and 76: FIGURE 2.13: Japan is past its work
Page 77 and 78: FIGURE 2.15: Thailand still has tim
Page 79 and 80: make this a key aim of national dev
Page 81 and 82: investment climate, as well as enco
Page 83 and 84: TABLE 2.4: Shares of workers in the
Page 85 and 86: Even before leaving home, migrant w
Page 87 and 88: Promote health and safety at work:
Page 89 and 90: BOX 2.8: Malaysia transforms an ind
Page 91 and 92: of resilient infrastructure are joi
Page 93: Chapter 3 NURTURING CHILDREN, UNLOC
Page 96 and 97: Asia-Pacific is home to 1.7 billion
Page 98 and 99: Commendable progress in education m
Page 100 and 101: Quality primary education mitigates
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In most Asia-Pacific countries, sec
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Strong tertiary education is a buil
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FIGURE 3.3: Access to tertiary educ
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94 TABLE 3.9: Youth illiteracy has
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TABLE 3.11: Child mortality rates b
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BOX 3.7: Malnutrition and disabilit
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Despite social and economic progres
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FIGURE 3.8: The share of youth who
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104 Young migrants are highly vulne
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as an important challenge. But they
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TABLE 3.15: Some countries with lar
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Immunization saves children’s liv
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BOX 3.10: Germany’s vocational tr
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BOX 3.12: Partnering with youth in
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116
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4. AGEING SOCIETIES: NEW OPPORTUNIT
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FIGURE 4.1: Asia-Pacific is one of
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TABLE 4.1: East Asia is the oldest
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BOX 4.2: Responses to poverty among
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BOX 4.3: A plan of action for older
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FIGURE 4.9: Per capita health-care
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BOX 4.5: China moves towards univer
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TABLE 4.3: Social pensions are an i
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FIGURE 4.12: Pension replacement ra
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BOX 4.7: Increasing links between p
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cupy space in some public buildings
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ment bodies, encourage regular inte
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BOX 4.9: Ageing countries begin enc
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help coordinate the work of other g
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for older people. Many advanced cou
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action. Free public transport, and
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Chapter 5 TAPPING THE HUMAN DYNAMIS
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In the last 30 years, Asia-Pacific
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FIGURE 5.3: Even countries with few
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FIGURE 5.6: Most people will contin
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160 Social, cultural and economic i
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The benefits of urbanization have n
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BOX 5.2: Pioneering urban poverty r
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vehicles on the road. Beijing issue
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Municipal governments in Asia-Pacif
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TABLE 5.4: Revenue mobilization opt
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172 City governments need to have t
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Investing in essential infrastructu
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176 in East Asian cities, and occur
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BOX 5.9: The Republic of Korea emba
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180
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6. AN AGENDA FOR ACTION: SHAPING TH
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Development Report argues, decent w
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with ministries overseeing youth, e
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This is an urgent priority in a reg
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SUSTAINING HUMAN DEVELOPMENT ACROSS
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plan automatically enrols people in
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BOX 6.3: Developing Delhi’s metro
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End Notes CHAPTER 1 1. UNFPA 2014b.
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63. WHO 2014b. 64. UNFPA 2012. 65.
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produces 40 percent of total econom
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206 The Asia Foundation. 2013. “T
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208 CODI (Community Organizations D
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210 Global Migration Group. 2014.
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212 Janwani. 2010. “Annual Report
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214 ———. 2012a. OECD Employme
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216 ———. 2011. “Follow-up t
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218 York. [www.unfpa.org/sites/defa
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———. 2012c. Malaysia Economic
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tables include the Caribbean countr
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224
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TABLE 2: Trends in the Human Develo
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TABLE 4: Gender Inequality Index 22
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TABLE 6: Trends in income poverty,
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TABLE 8: Fertility rate and crude d
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TABLE 10: Trends and share of child
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TABLE 12: Trends and share of young
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TABLE 14: Trends and share of older
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TABLE 16: Education indicators and
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TABLE 17: Health indicators 242
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TABLE 18: Employment and unemployme
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TABLE 19: International trade, fina
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ABOUT ASIA-PACIFIC HUMAN DEVELOPMEN
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