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UNDERSTANDING DEMOGRAPHIC DIVIDENDS IN AFRICA: THE NTA APPROACH

Published online by Cambridge University Press:  10 January 2017

Latif Dramani  and
Idossou Jean-Baptiste Oga
Latif Dramani*
Affiliation:
CREFAT–Université de Thies
Idossou Jean-Baptiste Oga
Affiliation:
LAREG–Université de Parakou
*
Address correspondence to: Latif Dramani, CREFAT – Université de Thies, Quartier Grand Standing, BP 988 Thies, Senegal; e-mail: latif.dramani@gmail.com
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Abstract

In this paper, we document the economic implications of changing demographic conditions in Africa. To construct support ratios, we use National Transfer Accounts (NTA) estimates of per capita labor income and consumption by age, as well as population estimates and projections provided by the UN Population Division for 16 African countries. First, we find that, on average, support ratios are rising in Africa. But compared with the support ratios in Asia and Latin America, the magnitude of those in Africa is lower because the percentage of effective workers in the total population is also low. Second, we find that human capital spending is high in countries with low fertility rates, which suggests a quantity–quality trade-off. NTA estimates also show that to capitalize on the demographic dividend, countries have to create economic opportunities for young adults. In addition, investment in human and physical capital is important to generate the second demographic dividend.

Keywords

Demographic transitionlabor incomedemographic dividendssupport ratioAfricaNTAJ11J31O15
Type
Essays
Information
Journal of Demographic Economics , Volume 83 , Issue 1: Short Essays on African Demography and Economic Development , March 2017 , pp. 85 - 101
Copyright
Copyright © Université catholique de Louvain 2017 

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