## changing-demographics-and-economic-growth-bloom

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---

### Demography and development: overview
- Demography influences social, economic, and political outcomes but does not unilaterally determine them; demographic trajectories and their development implications respond to economic incentives, policy and institutional reforms, and changes in technology, cultural norms, and behavior.
- The world is undergoing a major demographic upheaval with three key components: population growth, changes in fertility and mortality, and associated changes in population age structure.

### Population growth
- World population milestones and projections:
  - It took more than 50,000 years for world population to reach 1 billion people.
  - World population was 3 billion in 1960; it reached 6 billion around 2000.
  - The United Nations projects world population will surpass 9 billion by 2037.
- Growth-rate trends:
  - Peak annual rates in excess of 2 percent in the late 1960s.
  - About 1 percent currently.
  - Projected to be half that by 2050.
- Developmental context and challenges:
  - Despite global income per capita more than doubling, life expectancy increasing by 16 years, and near-universal primary school enrollment during 1960–2000, rapid population growth raises demands for food, clothing, housing, education, infrastructure, productive employment absorption, and environmental protection.
- Distributional shifts:
  - Less developed countries: 68 percent of world population in 1950; 84 percent today.
  - Virtually all of the nearly 2 billion net additions to world population projected over the next three decades will occur in less developed regions.
- Country-specific notes:
  - China: 1.44 billion people (currently the largest national population).
  - India: 1.38 billion (currently second).
  - By the end of this decade, India projected at 1.50 billion and China’s peak projected at 1.46 billion.
  - Between 2020 and 2050, Nigeria and Pakistan projected to surge; Nigeria projected to overtake the United States to become the world’s third-most-populous nation.
  - Asia: 60 percent of world population today and 54 percent in 2050.
- Population decline:
  - In 61 countries and territories (home to 29 percent of the world’s people), population growth in 2020–50 is projected to be negative.
  - The sharpest decline projected is −23 percent for Bulgaria.

### Mortality, fertility, and migration
- Fundamental drivers:
  - Population size and growth reflect mortality, fertility, and international migration; these forces vary across countries and respond to economic shocks and political developments.
- Life expectancy:
  - For most of human history, average life expectancy was about 30 years.
  - Between 1950 and 2020, life expectancy increased from 46 to 73 years.
  - It is projected to increase by another four years by 2050.
  - By 2050, life expectancy is projected to exceed 80 years in at least 91 countries and territories that will then be home to 39 percent of the world's population.
  - Life-expectancy gap example: Africa vs. North America—32 years in 1950, 24 years in 2000, 16 years today.
- Fertility trends:
  - In the 1950s and 1960s, the average woman had roughly five children.
  - Today, the average woman has somewhat fewer than 2.5 children.
  - Between 1970 and 2020, the fertility rate declined in every country in the world.
  - Regional fertility rates: Africa 4.3; Europe 1.6.
  - Population momentum: even a fertility rate of 2.1 can translate into positive population growth if age structure is weighted toward prime childbearing years; 69 countries and territories are currently growing despite fertility rates below 2.1.
- Migration:
  - International migration matters strongly in some countries (e.g., Guyana, Samoa, Tonga for net emigration; Bahrain, Qatar, United Arab Emirates for net immigration).
  - Among the world’s 10 population super powers, migrants had the largest relative presence in the United States (15 percent in 2019).
  - More than 96 percent of the world’s population currently live in their countries of birth.

### Age structure dynamics and the demographic dividend
- Age structure origins:
  - Reflects fertility and mortality history; improved child survival can create a baby boom that eventually subsides as fertility declines.
- Demographic dividend:
  - Occurs when a growing share at prime working and saving ages enhances per capita productive capacity and opens a window for rapid income growth and poverty reduction.
  - The dividend’s realization depends on: the nature and pace of demographic change; operation of labor and capital markets; macroeconomic management and trade policies; governance; and human capital accumulation.
- Country projections and measures:
  - From 2020 to 2030, Nepal, Jordan, Bhutan, and Eswatini are projected to experience the largest gains among countries in the ratios of their working-age to non-working-age populations.
  - Dependency ratio (inverse of working-age to non-working-age ratio):
    - 1990: more developed regions 0.68; less developed regions 1.04.
    - 2020: more developed regions 0.70; less developed regions 0.75.
    - 2050 projection: more developed regions 0.89; less developed regions 0.77.
  - Interpretation: By 2050, dependency ratio projected to be greater in more developed regions than in less developed regions; demographics will be more favorable to economic well-being in less developed regions than in more developed regions, especially Africa where the ratio is projected to decline by 2050.
- Policy implications by country type:
  - Countries yet to experience appreciable demographic transitions (e.g., Chad, Central African Republic, Somalia, Sierra Leone): invest in infant and child survival (expanded vaccine coverage, well-provisioned primary health care).
  - Populations with health and survival gains: enable fertility decline—promote girls’ education and access to reproductive health and family planning services.
  - Countries with large working-age shares: realize potential benefits—support competitive labor and capital markets; equip workers with human capital; build infrastructure; sound macroeconomic management; carefully designed trade policies; and good governance.
  - Note: In some countries, per capita income is currently lower in real terms than it was in some today’s advanced economies when they were at comparable demographic stages, complicating investment in these policies.

### Global graying (population aging)
- Scale and pace:
  - Population aging is the dominant demographic trend of the twenty-first century, reflecting increasing longevity, declining fertility, and progression of large cohorts to older ages.
  - Expect to add 1 billion older individuals in the next three to four decades, atop the more than 700 million older people today.
  - The 85+ age group is growing especially fast and is projected to surpass half a billion in the next 80 years.
- Country- and region-specific notes:
  - Japan: currently 28 percent of its population 65 and over (triple the world average).
  - By 2050, 29 countries and territories will have larger elder shares than Japan has today.
  - Republic of Korea projected to reach an elder share of 38.1 percent and a median age of 56.5 in 2050; Japan’s median age projected at 54.7 in 2050 (Japan’s current median age 48.4).
  - Current median age comparison: Japan 48.4; Africa 19.7.
  - Three decades ago, the world had more than three times as many adolescents and young adults (15- to 24-year-olds) as older people; three decades from now, those age groups will be roughly on par.
- Income-group dynamics:
  - Sharpest growth in numbers of older people will occur in countries currently classified as middle income (which make up 74 percent of the world population).
  - Older-population share in middle-income countries is increasing faster than in low- and high-income counterparts.
  - Compared with high-income countries, today’s middle-income countries are projected to have appreciably greater real incomes when their older-population shares reach comparable levels—contradicting the claim that developing economies are getting old before they get rich.
- Economic and fiscal concerns:
  - Potential downward pressure on economic growth due to labor and capital shortages and falling asset prices as older cohorts liquidate investments.
  - Fiscal stress from rising pension liabilities and higher costs of health and long-term care associated with increased incidence and prevalence of chronic diseases such as cancer.
  - Offsetting factors include productive nonmarket activities by older people (volunteer work, caregiving).
- Policy and technological responses:
  - Policy reforms to promote financial sustainability and intergenerational equity of health and pension financing.
  - Raising the legal age of retirement to ease fiscal and labor pressures.
  - Pronatalist tax incentives are an option for the long term, though their effect on fertility is thus far unproven.
  - Health-system emphasis on early detection and prevention (e.g., awareness and subsidization of physical activity).
  - Relaxing institutional and economic barriers to international immigration from regions with relatively large working-age populations could alleviate labor shortages.
  - Technological innovations: new drugs to slow aging and add healthy years; assistive devices such as robots.
  - Institutional innovations: new models of home health care, public transportation systems, urban design, and financial instruments.

### The bottom line
- Demographic indicators have changed dramatically since the early 1950s and will continue to change in coming decades.
- Population aging is displacing population growth as the focal demographic phenomenon, but both will have profound repercussions for indicators and determinants of economic well-being and progress.
- Demographics are neither immutable nor determinative; policy, institutions, and technology can alter demographic trajectories and their implications for individual and collective well-being.

### Population aged 85+ projections (Section 2)
- Among the older population, the group aged 85+ is growing especially fast and is projected to surpass half a billion in the next 80 years.

*David E. Bloom, professor of economics and demography at Harvard University’s T. H. Chan School of Public Health.*

### Section 1

### changing-demographics-and-economic-growth-bloom - Section 1

### Demography and development: overview
- Demography influences social, economic, and political outcomes but does not unilaterally determine them; demographic trajectories and their development implications respond to economic incentives, policy and institutional reforms, and changes in technology, cultural norms, and behavior.
- The world is undergoing a major demographic upheaval with three key components: population growth, changes in fertility and mortality, and associated changes in population age structure.

### Population growth
- World population milestones and projections:
  - It took more than 50,000 years for world population to reach 1 billion people.
  - World population was 3 billion in 1960; it reached 6 billion around 2000.
  - The United Nations projects world population will surpass 9 billion by 2037.
- Growth-rate trends:
  - Peak annual rates in excess of 2 percent in the late 1960s.
  - About 1 percent currently.
  - Projected to be half that by 2050.
- Developmental context and challenges of rapid population growth:
  - Despite global income per capita more than doubling, life expectancy increasing by 16 years, and near-universal primary school enrollment during 1960–2000, rapid population growth raises demands for food, clothing, housing, education, infrastructure, productive employment absorption, and environmental protection.
- Distributional shifts:
  - Countries the United Nations classifies as less developed encompassed 68 percent of world population in 1950; today they represent 84 percent.
  - Virtually all of the nearly 2 billion net additions to world population projected over the next three decades will occur in less developed regions.
- Country-specific population notes:
  - China: 1.44 billion people (currently the largest national population).
  - India: 1.38 billion (currently second).
  - By the end of this decade, India projected at 1.50 billion and China’s peak projected at 1.46 billion.
  - Between 2020 and 2050, Nigeria and Pakistan projected to surge; Nigeria projected to overtake the United States to become the world’s third-most-populous nation.
  - Asia: 60 percent of world population today and 54 percent in 2050.
- Population decline:
  - In 61 countries and territories (home to 29 percent of the world’s people), population growth in 2020–50 is projected to be negative.
  - The sharpest decline projected is −23 percent for Bulgaria.

### Mortality, fertility, and migration
- Fundamental demographic drivers:
  - Population size and growth reflect mortality, fertility, and international migration.
  - These forces vary across countries and respond to economic shocks and political developments.
- Life expectancy:
  - For most of human history, average life expectancy was about 30 years.
  - Between 1950 and 2020, life expectancy increased from 46 to 73 years.
  - It is projected to increase by another four years by 2050.
  - By 2050, life expectancy is projected to exceed 80 years in at least 91 countries and territories that will then be home to 39 percent of the world's population.
  - Life-expectancy gap example: Africa vs. North America—32 years in 1950, 24 years in 2000, 16 years today.
- Fertility trends:
  - In the 1950s and 1960s, the average woman had roughly five children.
  - Today, the average woman has somewhat fewer than 2.5 children.
  - Between 1970 and 2020, the fertility rate declined in every country in the world.
  - Regional fertility rates: Africa 4.3; Europe 1.6.
  - Population momentum: even a fertility rate of 2.1 can translate into positive population growth if age structure is weighted toward prime childbearing years; 69 countries and territories are currently growing despite fertility rates below 2.1.
- Migration:
  - International migration matters strongly in some countries (e.g., Guyana, Samoa, Tonga for net emigration; Bahrain, Qatar, United Arab Emirates for net immigration).
  - Among the world’s 10 population super powers, migrants had the largest relative presence in the United States (15 percent in 2019).
  - More than 96 percent of the world’s population currently live in their countries of birth.

### Age structure dynamics and the demographic dividend
- Age structure origins:
  - Reflects fertility and mortality history; improved child survival can create a baby boom that eventually subsides as fertility declines.
- Demographic dividend:
  - Occurs when a growing share at prime working and saving ages enhances per capita productive capacity and opens a window for rapid income growth and poverty reduction.
  - The dividend’s realization depends on: the nature and pace of demographic change; operation of labor and capital markets; macroeconomic management and trade policies; governance; and human capital accumulation.
- Country projections and measures:
  - From 2020 to 2030, Nepal, Jordan, Bhutan, and Eswatini are projected to experience the largest gains among countries in the ratios of their working-age to non-working-age populations.
  - Dependency ratio (inverse of working-age to non-working-age ratio):
    - 1990: more developed regions 0.68; less developed regions 1.04.
    - 2020: more developed regions 0.70; less developed regions 0.75.
    - 2050 projection: more developed regions 0.89; less developed regions 0.77.
  - Interpretation: By 2050, dependency ratio projected to be greater in more developed regions than in less developed regions; demographics will be more favorable to economic well-being in less developed regions than in more developed regions, especially Africa where the ratio is projected to decline by 2050.
- Policy implications by country type:
  - Countries yet to experience appreciable demographic transitions (e.g., Chad, Central African Republic, Somalia, Sierra Leone): policies to catalyze transitions—invest in infant and child survival (expanded vaccine coverage, well-provisioned primary health care).
  - Populations with health and survival gains: policies to enable fertility decline—promote girls’ education and access to reproductive health and family planning services.
  - Countries with large working-age shares: policies to realize potential benefits—support competitive labor and capital markets; equip workers with human capital; build infrastructure; sound macroeconomic management; carefully designed trade policies; and good governance.
  - Note: In some countries, per capita income is currently lower in real terms than it was in some today’s advanced economies when they were at comparable demographic stages, complicating investment in these policies.

### Global graying (population aging)
- Scale and pace:
  - Population aging is the dominant demographic trend of the twenty-first century, reflecting increasing longevity, declining fertility, and progression of large cohorts to older ages.
  - Expect to add 1 billion older individuals in the next three to four decades, atop the more than 700 million older people today.
  - The 85+ age group is growing especially fast and is projected to surpass half a billion in the next 80 years.
- Country- and region-specific notes:
  - Japan: currently 28 percent of its population 65 and over (triple the world average).
  - By 2050, 29 countries and territories will have larger elder shares than Japan has today.
  - Republic of Korea projected to reach an elder share of 38.1 percent and a median age of 56.5 in 2050; Japan’s median age projected at 54.7 in 2050 (Japan’s current median age 48.4).
  - Current median age comparison: Japan 48.4; Africa 19.7.
  - Three decades ago, the world had more than three times as many adolescents and young adults (15- to 24-year-olds) as older people; three decades from now, those age groups will be roughly on par.
- Income-group dynamics:
  - Sharpest growth in numbers of older people will occur in countries currently classified as middle income (which make up 74 percent of the world population).
  - Older-population share in middle-income countries is increasing faster than in low- and high-income counterparts.
  - Compared with high-income countries, today’s middle-income countries are projected to have appreciably greater real incomes when their older-population shares reach comparable levels—contradicting the claim that developing economies are getting old before they get rich.
- Economic and fiscal concerns:
  - Potential downward pressure on economic growth due to labor and capital shortages and falling asset prices as older cohorts liquidate investments.
  - Fiscal stress from rising pension liabilities and higher costs of health and long-term care associated with increased incidence and prevalence of chronic diseases such as cancer.
  - Offsetting factors include productive nonmarket activities by older people (volunteer work, caregiving).
- Policy and technological responses:
  - Policy reforms to promote financial sustainability and intergenerational equity of health and pension financing.
  - Raising the legal age of retirement to ease fiscal and labor pressures.
  - Pronatalist tax incentives are an option for the long term, though their effect on fertility is thus far unproven.
  - Health-system emphasis on early detection and prevention (e.g., awareness and subsidization of physical activity).
  - Relaxing institutional and economic barriers to international immigration from regions with relatively large working-age populations could alleviate labor shortages.
  - Technological innovations: new drugs to slow aging and add healthy years; assistive devices such as robots.
  - Institutional innovations: new models of home health care, public transportation systems, urban design, and financial instruments.

### The bottom line
- Demographic indicators have changed dramatically since the early 1950s and will continue to change in coming decades.
- Population aging is displacing population growth as the focal demographic phenomenon, but both will have profound repercussions for indicators and determinants of economic well-being and progress.
- Demographics are neither immutable nor determinative; policy, institutions, and technology can alter demographic trajectories and their implications for individual and collective well-being.

*David E. Bloom, professor of economics and demography at Harvard University’s T. H. Chan School of Public Health.*

### Section 2

### changing-demographics-and-economic-growth-bloom - Section 2

### Population aged 85+ projections
- Among the older population, the group aged 85+ is growing especially fast and is projected to surpass half a billion in the next 80 years.

*Source: changing-demographics-and-economic-growth-bloom - Section 2*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2020/march/changing-demographics-and-economic-growth-bloom.pdf_