8 Figure 3 plots the rato of the working age to the non working age populaton

8 figure 3 plots the rato of the working age to the

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8. Figure 3 plots the rato of the working-age to the non-working age populaton in both regions, where the workingage populaton is defned as the populaton aged 15-64, and the non-working-age populaton (for simplicity, “dependents”) is defned as the populaton under age 15 or aged 65 and over. Figure 3 Changing age structure, 1950-2010 9. This chart illustrates several critcal points. a. First , the rato of working-age people to dependents has been lower in Sub-Saharan Africa than in East Asia throughout the entre period shown. This means that East Asia has had higher numbers of people in the prime years for working and saving. 3 Downloaded by Vicky Gupta ([email protected]) lOMoARcPSD|3929542
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b. The diference between the two lines is primarily a refecton of a relatvely high burden of youth dependency in Sub-Saharan Africa, due to its long history of high fertlity. By contrast, East Asia, with a precipitous decline in fertlity, experienced the most rapid demographic transiton in history. c. Today, East Asia has more than 2.3 workers for every non-worker , dwarfng Sub-Saharan Africa’s 1.2 workers per non-worker. This diference translates into households having an entre extra worker for every non-worker, which in turn results in a commensurately large increase in income per household, ultmately aggregatng upward to increased country level growth. 10. Fertlity decline lowers youth dependency immediately , but does not appreciably afect the working-age populaton for 20-25 years. But when the working-age populaton does increase as a share of the total populaton, there is an opportunity for economic growth. 11. Demographic change accounts for approximately 2 percentage points of the growth rate of income per capita in East Asia , representng one-third of the supposed miracle. Labeling the economic growth East Asia as a miracle, therefore, was partly a refecton of a failure to consider the implicatons of demographics. a. However, demography is not destny ; growth of the working-age share of the populaton does not automatcally lead to an acceleraton of economic growth . b. Demographic change may provide a boost to economic growth, but appropriate policies are needed to allow this to happen. Without such policies, a country may instead fnd itself with large numbers of unemployed or underemployed working-age individuals. 12. This scenario would be a “demographic disaster”, instead of a demographic dividend, in some instances promotng state fragility and failure, potentally with adverse politcal, social, economic, and ecological spillovers to other countries. SECTION 1.2: POPULATION HEALTH 1. The second signifcant breakthrough in thinking is ofen summarized by the phrase “healthier means wealthier.” In other words, health and longevity are very consequental for economic performance . Although macroeconomists and economic policymakers have traditonally viewed populaton health as a social indicator that improves only afer countries become wealthy, new thinking views health itself as an instrument of economic growth, not simply a consequence of it .
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