Three Takeaways on the Four Dividends: How Age Structure Change Can Benefit Development

The beneficial links between population age structure change and economic development are widely known, and often described as the “demographic dividend.” If fertility rates decline, the share of working-age adults in a population increases and incomes grow—even more so if the financial climate encourages savings and investment.

But the dividends from demographic change are not limited to the economy. PRB’s new interactive web feature shows how maturing age structures open a window of opportunity across four sectors—health, education, economic, and political. With this web feature, you can discover how age structure change facilitates development goals in all four sectors and why countries should invest in programs that support this change, such as voluntary family planning, child health, and women’s education.

Learn that:

  1. High-fertility countries are unlikely to achieve desired levels of development across multiple sectors. Statistical analysis using data from over 100 countries over the past four decades shows that countries with very youthful populations almost never attain high thresholds of development. For example, Nigeria, with a fertility rate of over five children per woman and a median age of 18, has only a 1 percent chance of achieving the Sustainable Development Goals (SDGs) target of reducing under-5 mortality to less than 25 deaths per 1,000 live births.
  2. Once fertility declines to less than three children per woman, rapid improvements in development measures are likely. While the odds of attaining high levels of development are low for youthful countries, they accelerate quickly once the demographic window of opportunity opens—when median age reaches 26 years. At that point, countries are more likely than not to have late-secondary school enrollment rates of at least 60 percent. And when median age reaches 31, they are at least 50 percent likely to have attained upper middle-income status.
  3. The demographic window of opportunity doesn’t open on its own. Persistently high fertility rates are the biggest barrier to age structure change, but are far from insurmountable. Dozens of countries have committed to expanding access to and use of voluntary family planning, an intervention to promote lower family size. To open the window of opportunity for all four dividends, countries should also prioritize educating and empowering women and broadening the reach of health services in rural and hard-to-reach communities.