The Window of Opportunity

Investment in family planning improves health outcomes, shapes a country’s demographic path, and strengthens the impact of other development initiatives in youth employment, education, training, and health. One potential benefit of family planning investment is a demographic dividend, a boost in economic growth and productivity that can raise incomes and allow families and governments to improve the health, education, and well-being of future generations.

Age Structures

For economic development, a country’s age structure is the key. When fertility and mortality are both high, the population pyramid tends to look like a true pyramid, with a large base of children and young people and a narrow top of older adults. Each age group is larger than the earlier, next oldest generation. Although the age structure represents a youthful population with many young people entering their working years, the proportion composed of younger dependents is even larger, which is an economically unfavorable balance because there are fewer workers to support each dependent. This is the age structure characterized by countries where fertility rates are still higher than three children per woman, including most of the countries in this database. Achieving a more balanced age structure in these countries will require sustained investments in family planning and reproductive health programs, as well as education and many socioeconomic policies, in order to open the window of opportunity.

The opportunity for a demographic dividend arises from the demographic transition, the shift to lower mortality and fertility rates, which changes the age structure of a population. The demographic dividend only becomes a possibility when fertility rates decline significantly, leading to a lower proportion of children relative to working-age adults. This change in the age structure of a population can be observed in a country’s population pyramid over time, as the base of the pyramid shrinks and the older working-age cohorts, typically ages 15–64, represent a bigger proportion of the population. With a relatively larger proportion of working-age people, the labor supply increases and there are more potential workers to support fewer young dependents and the elderly. The balance of dependents and workers is referred to as a dependency ratio. The window of opportunity for the demographic dividend opens when the dependency ratio reaches 60 dependents supported by every 100 working-age adults, which tends to occur when the total fertility rate of a country is around 3.

In 2010, five countries in sub-Saharan Africa—Botswana, Cape Verde, Mauritius, Reunion, and South Africa—had a fertility rate of less than three children per woman, positioning them at the beginning of the window of opportunity to achieve the demographic dividend.

Realizing the Demographic Dividend

Although a favorable age structure, such as those of the “Asian Tigers” in the 1970s and 1980s, can have a positive impact on a country’s development, the demographic dividend is not guaranteed. To achieve the dividend, countries must also invest in social and economic development in a timely fashion to capitalize on the window of opportunity. For the benefits of a larger proportion of working-age adults to be realized, jobs—especially outside the agriculture sector—must be readily available for new entrants to the labor force, and new entrants must be properly educated and trained. Other important factors include a stable economic climate for savings and investment, women’s ability to enter the workforce, trade openness, and good governance. In sub-Saharan African countries, fertility declines are only beginning. The time is ripe to fully implement the policies, investments, and infrastructure necessary to harness the potential of a demographic dividend.

The demographic dividend offers countries the potential opportunity to stimulate economic development and improve well-being for their people, but its success ultimately requires integrated demographic, economic, and social policies beginning today.