SHAPING THE FUTURE HOW CHANGING DEMOGRAPHICS CAN POWER HUMAN DEVELOPMENT

BOX 1.5:
Japan’s first and second demographic
dividends
Japan was the first Asian country to experience
fertility decline and dramatic increases in life
expectancy (Figure 1.16). In the 1950s, 1960s
and to a lesser extent the 1970s, Japan enjoyed
a first demographic dividend equal to about half
a percentage point of economic growth, while
the second dividend added about 1 percentage
point. By the 1980s, the first dividend phase
was over, but the second dividend continued
to favour economic growth, adding between
1 and 1.5 percentage points. By 2000, the
first dividend had turned negative but was still
balanced by the second dividend, indicating a
modest net contribution to economic growth.
FIGURE 1.16:
Japan’s negative first dividend is
balanced by a positive second dividend
Source: Based on Mason 2015.
HISTORIC CHANGES,
LIMITED TIME
Asia-Pacific is a vast region, diverse in its human
development and demographic profile. But three
broad, common patterns are evident. First, the
region is experiencing sweeping demographic
changes. Second, this is happening at a historically
rapid pace—and it will not last forever.
Finally, while East Asia has already reached
a relatively advanced stage in its demographic
transition, and thus needs to prepare for an
ageing population, other subregions have a few
decades to leverage potential dividends. Many
Asia-Pacific countries are currently in the middle
stages of change.
Demographic shifts have far-reaching implications
across all elements of human development.
At the same time, appropriate policy
choices and consistent investments in human
development are critical to make the most of
the demographic window of opportunity. If
countries plan for the transition, build human
capabilities, encourage creativity and innovation
to flourish, and ensure the process is guided by
mechanisms for participation and accountability,
individuals and societies as a whole can end up
better educated, healthier and wealthier.
Lessons from one setting are hardly likely
to be fully effective in others. There is little
scope for a uniform set of recommendations to
move forward. Each country needs to study its
demographic trends, and their causes and consequences,
with reference to their development
goals. They must identify problems and take
corrective actions accordingly. Political will to
do this is crucial, particularly to steer the demographic
dividend in inclusive ways that benefit
all people, now and for generations to come.
There is no one-sizefits-all
strategy; each
country needs to
study its demographic
trends and take
actions accordingly
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