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DEMOGRAPHIC DIVIDEND IN
AFRICA: DOES IT APPLY TO
MALAWI?
David Canning
Harvard T.H. Chan School of Public Health
Friday 5th August
IFPRI, Lilongwe, Malawi
1
Population and Development
• Negative effects of
population growth-
population bomb
• Positive effects – scale
and technology
• National Academy of
Sciences 1986 – no
effect empirically
• Neutral position on
population
2
Components of Population Growth
• Kelly and Schmidt 1995
• While growth of population numbers does not
matter, components do matter.
• Population growth = birth rate- death rate.
• High birth rates seem to have a negative effect on
growth.
• High death rates seem to have a negative effect on
growth.
4
Figure 1b
Birth Rates and Economic Growth
-8
-6
-4
-2
0
2
4
6
8
10
0 1 2 3 4 5 6
Crude Birth Rate 1980 (percent)
GDPperCapitaGrowthRate1980-2000
(percent)
Based on data for 127 countries from the World Bank's World Development Indicators 2011.
5
-8
-6
-4
-2
0
2
4
6
8
10
0 0.5 1 1.5 2 2.5 3
GDPperCapitaGrowthRate1980-2000(percent)
Crude Death Rate 1980 (percent)
Death Rates and Economic Growth
Based on data for 127 countries from he World Bank's World Development Indicators 2011.
Asian Economic Miracle
• What caused the Asian
miracle? ADB 1997
• Growth, labor, capital
Bloom, Williamson
• Growth regressions
– Infrastructure
– Health (Life expectancy)
– Age structure
6
New View on
Importance of Population
• Not just population numbers
• Age structure effects - very large effects
• Explains about a third of the Asian Miracle
7
Health and Wealth of Nations
• Effects of child health
on physical and
cognitive development
• Effects of life span on
life cycle behavior
• Effect of child mortality
reductions on fertility
• WHO Commission on
Macroeconomics and
Health 2001
8
The Demographic Dividend
• Pure age structure effects
• Behavioral effects
– Female labor supply
– Investments in child health and
education
– Longevity and saving
• Dividend not automatic
– extra resources must be productively
employed
– Dividend must be earned by
investments – increased policy effects
9
Working Age Share is Linked to
Economic Takeoff
1
1.5
2
2.5
3
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
RatioofWorkingAgeto
Dependents
Year
Source: World Bank Medium Fertility Variant
Ratio of Working Age to Dependents
Sub Saharan Africa
East Asia
South Asia
10
11
12
Structure
• Introduction
• Demographic Dynamics in Africa
• Determinants of the Demographic Transition
• Human Development Payoffs
• Jobs Payoffs
• Economic Growth in Africa
• Policies to Speed up the Demographic
Transition
• Policies to Reap the Demographic Dividend
13
Total Fertility Rate in Select World
Regions, 1960–2010
14
0
1
2
3
4
5
6
7
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
TotalFertilityRate
Sub-Saharan Africa East Asia & Pacific Europe & Central Asia Latin America & Caribbean
Middle East & North Africa North America South Asia World
Source: Health, Nutrition and Population Statistics.The World DataBank 2013.
Great Heterogeneity in Fertility
Transition
15
1 2 3 4 5 6 7
Mauritius Réunion Gabon Togo Senegal Malawi Niger
South Africa Lesotho Ghana Comoros DRC
Cape Verde Namibia Ethiopia Gambia Zambia
Botswana Zimbabwe Congo Mozambique Chad
Swaziland Côte d'Ivoire Sierra Leone Uganda
Sao Tome and Principe Burundi Guinea-Bissau Somalia
Sudan Equatorial Guinea Mali
Cameroon Liberia
Eritrea Rwanda
Mauritania Guinea
Kenya Benin
Madagascar Tanzania
CAR Nigeria
Angola
Burkina Faso
Total Fertility Rates
Fertility Reduction
The Demographic Dividend
• Pure age structure effects
• Behavioral effects
– Female labor supply
– Investments in child health and
education
– Longevity and saving
• Dividend not automatic
– extra resources must be productively
employed
– Dividend must be earned by
investments
16
Proximate Determinates of Fertility
17
Source: Madhavan et al 2013. Data Source: Various DHSs.
Proximate Determinants
of Fertility Change
18
From Madhavan et al 2013. Data Source: Various DHS.
A Family Planning Intervention Reduced Fertility
in Navrongo, Ghana
Treatment Area: Comparison Area
19
n
Malawi Family Planning Project
• Improving Access to Post Partum Family
Planning in Lilongwe
• RCT – 2000 women
• Components – FP counselling, transport to
Good Health Kauma Tunza clinic, free FP
services, side effect treatment
• Outcomes: Contraceptive prevalence, birth
spacing, child health and education, female
health and employment
• Demographic dividend in the household 20
Policies to Promote Fertility Decline
Decrease Child Mortality
21*World Development Indicator Data. 2010
Mortality Transition
22
Below 50 50-99 100-149 150-199 200-249
Réunion Namibia Comoros Guinea Chad
Mauritius Botswana Tanzania Cameroon
Cape Verde Madagascar Kenya Zambia
Eritrea Gambia Nigeria
Ghana Ethiopia Niger
Sao Tome and Principe Swaziland Burundi
Gabon Congo Burkina Faso
South Africa Lesotho Equatorial Guinea
Zimbabwe Togo Angola
Senegal Mauritania CAR
Sudan Côte d'Ivoire Sierra Leone
Liberia Somalia
Uganda DRC
Rwanda Mali
Benin Guinea-Bissau
Malawi
Mozambique
Under 5 Mortality per 1000 Births
Fertility Rates by Women’s Education
Data from various Demographic and Health Surveys.
Female Education Is a Major Diver of Fertility Rates
24
Education of Women by Birth Year:
Ethiopia
25
012345
1960 1970 1980 1990
Birth Cohort
No Coverage Partial Coverage Full Coverage
26
Male-Female Education Gap in Sub-Saharan Africa--
Secondary Enrollment
0
0.5
1
1.5
2
2.5
3
12-14 years 15-19 years 20-24 years 25-29 years
(Reference)
30-34 years 35-39 years 40-44 years 45-49 years
Infant Mortality
Adjusted RRR: Age of Mother at Birth
Short Birth Spacing Increases Infant Mortality
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
7-11
months
12-17
months
18-23
months
24-29
months
30-35
months
36-47
months
(ref)
48-59
months
60-95
months
>95
months
Adjusted Relative Risk by BirthInterval
28
-3
-2
-1
0
1
2
3
4
5
6
1961-1965 1966-1970 1971-1975 1976-1980 1981-1985 1986-1990 1991-1995 1996-2000 2001-2005 2006-2010
Annual Growth Rates
GDP & GDP per capita
GDP growth GDP per capita growth
Economic Growth in Sub-Saharan
Africa
29
30
Economic Consequences
The Demographic Dividend
• Working age share 30 – 50 year boost
– Labor force per capita
• Investments in
• Child Health
• Education
• Female Labor Force Participation
• Savings
31
Demographic Dividend is not
Automatic
• Depends on effective policies in other areas
– Education
– Labor market
– Trade
– Governance
– Macroeconomic management
• Demography creates supply side increases in
labor, human capital, and saving – but there is
still a need for jobs and investment
Increasing Youth Cohorts In Sub Saharan
Africa
0
5
10
15
20
25
30
35
40
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
YearlyCohort15-24(Million)
Eastern Asia South-Central Asia Sub-Saharan Africa
33
Impact of large youth cohorts
• Youth Unemployment
• Underemployment in unpaid and low
productivity jobs
• Slows industrialization and structural
transformation, youth are absorbed in low
productivity sectors such as agriculture
• Requires high levels of investment to maintain
capital labor ratio
34
35
Goals Polices
Speed the Demographic Transition
To empower women and
allow fertility choices
Child mortality, female education, social norms, access
to family planning
Realizing the Labor Force Dividend
To absorb Youth Bulge FDI, domestic saving, natural resource revenues
education, infrastructure, Industrialization
(Agriculture and natural resources not sufficient)
Realizing the Savings Dividend
Harness the 2nd dividend Improve policies and institutions for promoting
domestic savings and investment
A Macrosimulation Model of the
Effect of Fertility Decline on
Economic Growth in Africa
Mahesh Karra
David Canning
Joshua Wilde
Forthcoming in Population and Development Review
PRELIMINARY RESULTS FROM THIS PAGE ONWARDS
PLEASE DO NOT CITE 36
Effective Labor
37
Population by Age
Labor SupplyEducation
Fertility
Height (Health)
Male Labor
Supply
Female Labor
Supply+
Effective Labor
Production
38
Effective Labor
Fertility
Physical CapitalLand
Modern Sector
Production
Savings
Previous
slide
Old Age
Dependency
Rate
Traditional Sector
Production +
Production
Raw Materials
Malawi
TFR Under Different Scenarios
39
Malawi Fertility - DHS
40
Malawi
Total Population Under Different
Scenarios
41
Malawi
Working Age Share of the
Population
42
Malawi
Average Years of Schooling of the
Workforce
43
Malawi
Share of Workers not in Agriculture
44
Key:
DRC
Share of Workers not in Agriculture
45
Key:
Malawi
PPP Income per Capita
46
DRC
PPP Income per Capita
47

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Demographic Dividend in Africa: Does it Apply to Malawi?

  • 1. DEMOGRAPHIC DIVIDEND IN AFRICA: DOES IT APPLY TO MALAWI? David Canning Harvard T.H. Chan School of Public Health Friday 5th August IFPRI, Lilongwe, Malawi 1
  • 2. Population and Development • Negative effects of population growth- population bomb • Positive effects – scale and technology • National Academy of Sciences 1986 – no effect empirically • Neutral position on population 2
  • 3. Components of Population Growth • Kelly and Schmidt 1995 • While growth of population numbers does not matter, components do matter. • Population growth = birth rate- death rate. • High birth rates seem to have a negative effect on growth. • High death rates seem to have a negative effect on growth.
  • 4. 4 Figure 1b Birth Rates and Economic Growth -8 -6 -4 -2 0 2 4 6 8 10 0 1 2 3 4 5 6 Crude Birth Rate 1980 (percent) GDPperCapitaGrowthRate1980-2000 (percent) Based on data for 127 countries from the World Bank's World Development Indicators 2011.
  • 5. 5 -8 -6 -4 -2 0 2 4 6 8 10 0 0.5 1 1.5 2 2.5 3 GDPperCapitaGrowthRate1980-2000(percent) Crude Death Rate 1980 (percent) Death Rates and Economic Growth Based on data for 127 countries from he World Bank's World Development Indicators 2011.
  • 6. Asian Economic Miracle • What caused the Asian miracle? ADB 1997 • Growth, labor, capital Bloom, Williamson • Growth regressions – Infrastructure – Health (Life expectancy) – Age structure 6
  • 7. New View on Importance of Population • Not just population numbers • Age structure effects - very large effects • Explains about a third of the Asian Miracle 7
  • 8. Health and Wealth of Nations • Effects of child health on physical and cognitive development • Effects of life span on life cycle behavior • Effect of child mortality reductions on fertility • WHO Commission on Macroeconomics and Health 2001 8
  • 9. The Demographic Dividend • Pure age structure effects • Behavioral effects – Female labor supply – Investments in child health and education – Longevity and saving • Dividend not automatic – extra resources must be productively employed – Dividend must be earned by investments – increased policy effects 9
  • 10. Working Age Share is Linked to Economic Takeoff 1 1.5 2 2.5 3 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 RatioofWorkingAgeto Dependents Year Source: World Bank Medium Fertility Variant Ratio of Working Age to Dependents Sub Saharan Africa East Asia South Asia 10
  • 11. 11
  • 12. 12
  • 13. Structure • Introduction • Demographic Dynamics in Africa • Determinants of the Demographic Transition • Human Development Payoffs • Jobs Payoffs • Economic Growth in Africa • Policies to Speed up the Demographic Transition • Policies to Reap the Demographic Dividend 13
  • 14. Total Fertility Rate in Select World Regions, 1960–2010 14 0 1 2 3 4 5 6 7 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 TotalFertilityRate Sub-Saharan Africa East Asia & Pacific Europe & Central Asia Latin America & Caribbean Middle East & North Africa North America South Asia World Source: Health, Nutrition and Population Statistics.The World DataBank 2013.
  • 15. Great Heterogeneity in Fertility Transition 15 1 2 3 4 5 6 7 Mauritius Réunion Gabon Togo Senegal Malawi Niger South Africa Lesotho Ghana Comoros DRC Cape Verde Namibia Ethiopia Gambia Zambia Botswana Zimbabwe Congo Mozambique Chad Swaziland Côte d'Ivoire Sierra Leone Uganda Sao Tome and Principe Burundi Guinea-Bissau Somalia Sudan Equatorial Guinea Mali Cameroon Liberia Eritrea Rwanda Mauritania Guinea Kenya Benin Madagascar Tanzania CAR Nigeria Angola Burkina Faso Total Fertility Rates
  • 16. Fertility Reduction The Demographic Dividend • Pure age structure effects • Behavioral effects – Female labor supply – Investments in child health and education – Longevity and saving • Dividend not automatic – extra resources must be productively employed – Dividend must be earned by investments 16
  • 17. Proximate Determinates of Fertility 17 Source: Madhavan et al 2013. Data Source: Various DHSs.
  • 18. Proximate Determinants of Fertility Change 18 From Madhavan et al 2013. Data Source: Various DHS.
  • 19. A Family Planning Intervention Reduced Fertility in Navrongo, Ghana Treatment Area: Comparison Area 19 n
  • 20. Malawi Family Planning Project • Improving Access to Post Partum Family Planning in Lilongwe • RCT – 2000 women • Components – FP counselling, transport to Good Health Kauma Tunza clinic, free FP services, side effect treatment • Outcomes: Contraceptive prevalence, birth spacing, child health and education, female health and employment • Demographic dividend in the household 20
  • 21. Policies to Promote Fertility Decline Decrease Child Mortality 21*World Development Indicator Data. 2010
  • 22. Mortality Transition 22 Below 50 50-99 100-149 150-199 200-249 Réunion Namibia Comoros Guinea Chad Mauritius Botswana Tanzania Cameroon Cape Verde Madagascar Kenya Zambia Eritrea Gambia Nigeria Ghana Ethiopia Niger Sao Tome and Principe Swaziland Burundi Gabon Congo Burkina Faso South Africa Lesotho Equatorial Guinea Zimbabwe Togo Angola Senegal Mauritania CAR Sudan Côte d'Ivoire Sierra Leone Liberia Somalia Uganda DRC Rwanda Mali Benin Guinea-Bissau Malawi Mozambique Under 5 Mortality per 1000 Births
  • 23. Fertility Rates by Women’s Education Data from various Demographic and Health Surveys.
  • 24. Female Education Is a Major Diver of Fertility Rates 24
  • 25. Education of Women by Birth Year: Ethiopia 25 012345 1960 1970 1980 1990 Birth Cohort No Coverage Partial Coverage Full Coverage
  • 26. 26 Male-Female Education Gap in Sub-Saharan Africa-- Secondary Enrollment
  • 27. 0 0.5 1 1.5 2 2.5 3 12-14 years 15-19 years 20-24 years 25-29 years (Reference) 30-34 years 35-39 years 40-44 years 45-49 years Infant Mortality Adjusted RRR: Age of Mother at Birth
  • 28. Short Birth Spacing Increases Infant Mortality 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 7-11 months 12-17 months 18-23 months 24-29 months 30-35 months 36-47 months (ref) 48-59 months 60-95 months >95 months Adjusted Relative Risk by BirthInterval 28
  • 29. -3 -2 -1 0 1 2 3 4 5 6 1961-1965 1966-1970 1971-1975 1976-1980 1981-1985 1986-1990 1991-1995 1996-2000 2001-2005 2006-2010 Annual Growth Rates GDP & GDP per capita GDP growth GDP per capita growth Economic Growth in Sub-Saharan Africa 29
  • 30. 30
  • 31. Economic Consequences The Demographic Dividend • Working age share 30 – 50 year boost – Labor force per capita • Investments in • Child Health • Education • Female Labor Force Participation • Savings 31
  • 32. Demographic Dividend is not Automatic • Depends on effective policies in other areas – Education – Labor market – Trade – Governance – Macroeconomic management • Demography creates supply side increases in labor, human capital, and saving – but there is still a need for jobs and investment
  • 33. Increasing Youth Cohorts In Sub Saharan Africa 0 5 10 15 20 25 30 35 40 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 YearlyCohort15-24(Million) Eastern Asia South-Central Asia Sub-Saharan Africa 33
  • 34. Impact of large youth cohorts • Youth Unemployment • Underemployment in unpaid and low productivity jobs • Slows industrialization and structural transformation, youth are absorbed in low productivity sectors such as agriculture • Requires high levels of investment to maintain capital labor ratio 34
  • 35. 35 Goals Polices Speed the Demographic Transition To empower women and allow fertility choices Child mortality, female education, social norms, access to family planning Realizing the Labor Force Dividend To absorb Youth Bulge FDI, domestic saving, natural resource revenues education, infrastructure, Industrialization (Agriculture and natural resources not sufficient) Realizing the Savings Dividend Harness the 2nd dividend Improve policies and institutions for promoting domestic savings and investment
  • 36. A Macrosimulation Model of the Effect of Fertility Decline on Economic Growth in Africa Mahesh Karra David Canning Joshua Wilde Forthcoming in Population and Development Review PRELIMINARY RESULTS FROM THIS PAGE ONWARDS PLEASE DO NOT CITE 36
  • 37. Effective Labor 37 Population by Age Labor SupplyEducation Fertility Height (Health) Male Labor Supply Female Labor Supply+ Effective Labor
  • 38. Production 38 Effective Labor Fertility Physical CapitalLand Modern Sector Production Savings Previous slide Old Age Dependency Rate Traditional Sector Production + Production Raw Materials
  • 41. Malawi Total Population Under Different Scenarios 41
  • 42. Malawi Working Age Share of the Population 42
  • 43. Malawi Average Years of Schooling of the Workforce 43
  • 44. Malawi Share of Workers not in Agriculture 44 Key:
  • 45. DRC Share of Workers not in Agriculture 45 Key:
  • 47. DRC PPP Income per Capita 47