Demographic Dividend or Demographic Threat in Pakistan

Pakistan Institute of Development Economics Working Paper Series

37 Pages Posted: 20 Feb 2007

See all articles by Dr. Durre Nayab

Dr. Durre Nayab

Pakistan Institute of Development Economics (PIDE), Islamabad, Pakistan

Date Written: 2007

Abstract

Population growth and size have remained the focus of debate for centuries but the recent demographic transition in developing countries has made social scientists take note of the changing age structure of the population as well. As a result of declining population growth and consequent changes in age structure, the proportion of working-age population is increasing in most developing countries, with an associated decline in the dependent age population, offering a window of opportunity to these countries that is referred to as the "demographic dividend".

Pakistan is also going through the demographic transition, and is experiencing a once-in-a-lifetime demographic dividend as the working-age population bulges and the dependency ratio declines. This paper looks into the demographic dividend available to Pakistan and its implications for the country, mainly through three mechanisms: labour supply, savings, and human capital. For economic benefits to materialise, there is a need for policies dealing with education, public health, and those that promote labour market flexibility and provide incentives for investment and savings. On the contrary, if appropriate policies are not formulated, the demographic dividend might in fact be a cost, leading to unemployment and an unbearable strain on education, health, and old age security.

Keywords: Demographic dividend, age-structure, demographic transition, Pakistan

JEL Classification: N35, R23, Z00

Suggested Citation

Nayab, Durre, Demographic Dividend or Demographic Threat in Pakistan (2007). Pakistan Institute of Development Economics Working Paper Series, Available at SSRN: https://ssrn.com/abstract=963426 or http://dx.doi.org/10.2139/ssrn.963426

Durre Nayab (Contact Author)

Pakistan Institute of Development Economics (PIDE), Islamabad, Pakistan ( email )

P. O. Box 1091
Islamabad, ICT -
Pakistan

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