SHAPING THE FUTURE HOW CHANGING DEMOGRAPHICS CAN POWER HUMAN DEVELOPMENT

2.
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PEOPLE AT WORK:
THE FOUNDATION FOR IMPROVED WELL-BEING
Asia-Pacific today has a unique opportunity to
accelerate human development, with more working-age
people, and fewer older and younger
dependents than at any point in its history. Its
workforce is growing at an unprecedented rate,
with 2.8 billion people aged 15-64 in 2015. The
share of the working-age population increased
from 58 percent in 1980 to its current peak of 68
percent. Correspondingly, the share of dependents,
young and old, has declined from 42 percent to its
present minimum of 32 percent. 1
These shifts offer many potential benefits. East
Asian economies, further along in the demographic
transition, have had tremendous success
during periods with large working-age populations.
In the last three decades, the share of China’s
working-age population grew from 56 percent to
a peak of 74 percent in 2010. During the same
time, the country enjoyed stellar economic growth
rates—double-digit figures in most years. As millions
of Chinese workers flooded labour markets,
China’s manufacturing and trade with the rest of
the world took off. Japan enjoyed its own ‘miracle’
of growth during 1950-1970, when its economically
active population was large. Having reached
higher levels of income during its most productive
years, Japan is now better positioned to manage
an ageing population.
It is possible for countries to use the demographic
dividend to become healthier, wealthier and better
educated. This depends largely on inclusive,
high-quality economic growth and investments in
human capabilities. By contrast, if, for instance, the
growth of decent jobs is not at par with an expanding
labour force, unemployment and underemployment
may rise, and wages will fall. The share of people
who are working but still earning below the international
poverty line is already large in Asia-Pacific,
and their numbers are likely to escalate with more
entrants into the labour force. Eventually, the failure
to deliver on growing expectations could put social
stability at risk.
This chapter provides an overview of the working-age
population in Asia-Pacific today. It explores the
potential for capturing a demographic dividend, and
analyses opportunities and challenges. Historical
analysis sheds light with experiences from three
countries—China, Japan and Thailand—that are
further along in their demographic transitions. A
final section looks at policy frameworks to channel
demographic opportunities into expanded human
development.
Not all countries have been successful, however,
in tapping the full human development benefits
of demographic transition. Transition presents
opportunities, but countries must then take actions
to seize these. For those embarking on transition
in the coming decades, the aim should be to make
policy choices and investments that steer the
process towards maximizing human development
benefits. These need to reach all people while
avoiding irreversible environmental harm.
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