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Confrence sur lconomie de limmigration Conference on the Economics of Immigration University of Ottawa 29 October 2010
Global demographic change and its economic consequences University of Ottawa, 29 October 2010
EllisIsland,circaearly1900s
First message
Demographics Matter
Second message
Outline
Twobreakthroughideas Demographicchangearoundtheworld Economicimplicationsofdemographicchange Demographyisnotdestiny
Outline
Twobreakthroughideas Demographicchangearoundtheworld Economicimplicationsofdemographicchange Demographyisnotdestiny
Worldpopulationmilestones
Worldpopulationinbillions Populationandyear 1billionin1804 2billionin1927 3billionin1960 4billionin1974 5billionin1987 6billionin1999 7billionin2012 8billionin2025 9billionin2046
Source: UN World Population Prospects, 2008 Revision
Timetakentoaddabillion About1,000,000years 123years 33years 14years 13years 12years 13years 13years 21years
IndiaandChina, asashareofworldpopulation
2028: India surpasses China 2010, % of world pop: China: 20%; India: 18% 2050, % of world pop: China: 15% India: 18%
1975 India
2025
2050
Historyofthought
Breakthroughideas
1. Thedemographicdividend
babybooms,busts,andechoes theironlawofdemography goodpolicyenvironment
Thedemographictransition
Birth rate
PigPython
Cover from the book by David Cork and Susan Lightstone: The Pig and the Python, How to Prosper from the Aging Baby Boom
Aviewfromtheinside.
Averageannualgrowthrateof GDPpercapita,19752005
7%
East Asian miracle
Averageannualgrowthrateof GDPpercapita,19752005
7%
East Asian miracle
Changingagestructure,19502010
2.50 2.25 2.00 1.75 1.50 1.25 1.00
1950
Source: UN, World Population Prospects 2008
1960
1970
1980
1990
2000
2010
Sub-Saharan Africa
University of Ottawa, 29 October 2010
2 percentagepoints/yearX 30 years
Breakthroughideas
1. thedemographicdividend
babybooms,busts,andechoes theironlawofdemography goodpolicyenvironment
2. healthiermeanswealthier
laborproductivity education savings FDI
University of Ottawa, 29 October 2010
UNSummitontheMDGs
September2022,2010
Demographicstoincome lotsofoomph!!!
Demographics
Income
A 10-year gain in life expectancy translates into between onehalf and one-full additional percentage point of annual growth of income per capita The demographic dividend accounted for roughly one-third of the East Asian miracle: 2 percentage points/year
Global demographic change and its economic consequences University of Ottawa, 29 October 2010
Outline
Twobreakthroughideas Demographicchangearoundtheworld Economicimplicationsofdemographicchange Demographyisnotdestiny
Infantmortalityrate,19502010
85
175
Lifeexpectancy,19502010
80 Life expectancy at birth, years
75 70 65 60 55 50 45 40 1950
1960
1970
1980
1990
Developing
2000
2010
1960
1970
1980
1990
Developing
2000
2010
Developed
Developed
Totalfertilityrate,19502010
6 5
Crudebirthanddeathrates,19502010
50 40 30 20 10 0
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040
1 1950
1960
1970
1980
1990
Developing
2000
2010
Developed
Canada
1950
Canada
1960
Canada
1970
Canada
1980
Canada
1990
Canada
2000
Canada
2010
Canada
2020
Canada
2030
Canada
2040
Canada
2050
Nigeria
1950
1960
1970
1980
1990
2000
2010
2020
2030
2040
2050
Outline
Twobreakthroughideas Demographicchangearoundtheworld Economicimplicationsofdemographicchange Demographyisnotdestiny
Migrationstatistics
214millioninternationalmigrants
Nearlyhalfarewomen 27.1millioninternallydisplacedpersons 15.2millionrefugees
TheEconomistweighsinagain
Indiasagestructureis evolvinginthesame directionasChinas. ItsbehindChina,butthe shareofitspopulation thatisofworkingageis growing.Indiastands readytoreapa demographicdividend.
Global demographic change and its economic consequences University of Ottawa, 29 October 2010
Realincomepercapita
5,000
4,000
3,000
2,000
1,000
2000
2005
Demographicchanges
Total fertility rate
7 Children per woman 6
2.5
5 4 3
2.0
1.5
2 1 1950
1975
2000
China India
2025
1975
2000
China India
2025
2050
Ratioofworkingagetononworking agepopulation,Canada,19502050
Outline
Twobreakthroughideas Demographicchangearoundtheworld Economicimplicationsofdemographicchange Demographyisnotdestiny
Reapingthedemographicdividendisnot automatic,andmaybetransitory
Needtocatalyzedemographictransition Needtoacceleratedemographictransition esp.fertilitydecline Needcompatiblepoliciesinotherareas
Catalyzingandacceleratingthe demographictransition
Investmentsinhealth Accelerationoffertilitydecline
Expansionoffamilyplanning Childsurvival Increasingschoolenrollment
Capturingthedemographic dividend
Needcompatiblepoliciesinotherareas
education health labormarket trade governance macroeconomicmanagement
IndianPMSinghonthedemographicdividend
Looking ahead, we enjoy a demographic dividend in terms of a growing working-age population in a world that is ageing rapidly.
23 Nov 2009
Global demographic change and its economic consequences University of Ottawa, 29 October 2010
FormerMexicanPresidentVicenteFox, onthedemographicdividend.
"Ialsowanttotellyouthattodaywehavea verypotentarmwithwhichtoovercome inequalitiesandmarginalization.Thatarmis whatwehavecalledthedemographic dividend." "Itiscrucial,trulycrucial,thatwetakefull advantageofit. Otherwise,wewillhavelosta greatopportunity. Asothershavesaidbefore me,educationandemploymentarethewaysto takeadvantageofthedemographicdividend." "Thesustainabilityofoursocialandeconomic developmentdepends,inlargemeasure,onour responsetothisopportunity."
Global demographic change and its economic consequences University of Ottawa, 29 October 2010
WBManagingDirectorNgoziOkonjo Iwealaonthedemographicdividend
Oneofthegreatestuntapped growthdriversinNigerias economyisouryouth population. Publicandprivatesectorsshouldinvestinhuman capital,laboursupply,andsavingstosecurethe demographicdividend.Thesehelptocreateknowledge basedeconomy.Policiesshouldbedirectedtowards gettingthedemographicdividend.
Global demographic change and its economic consequences University of Ottawa, 29 October 2010
a threat more grave and certain than those posed by chemical weapons, nuclear proliferation, or ethnic strife.
-- Peter Peterson
Movingfromdemographicsto economics
Takingaccountofdemographicsin economicgrowthanalysesandprojectionsis technicallychallenging Inprinciple,bothbehavioralchangesand policychoicescanaffecttheselinks
Globallaborforce:1960,2005,and2050
YEAR 2005 Actual
2050 Projd
67.4
65.8 47.1
61.4 49.0
LFTP
(labor force/total pop)
42.3
Economicimplications
Accountingeffects,yes,butdontforget aboutfertilitydecline Behavioraleffects,too
Womenslaborforceparticipationrises Childhealth,educationalattainment,and cognitivefunction Longerlifespansmaymeanhighersavings
Potentiallykeyroleforpublicpolicy
Ageofretirement Internationalmigration
Changesinmalelifeexpectancyand retirementage,19652005,43countries
Increase 1965 2005 (years) Malelifeexpectancy, average Maleretirementage, average 64.7 73.4 8.8
62.9
63.3
0.4
Source: World Bank (2007) for life expectancy. Social Security Administration, United States (2010) for retirement age.
AFP/GETTY Riot police charge at student demonstrators in Lyon, October 18, 2010
GETTY Images Students and riot police clash in Paris October 21, 2010
Thepossibilityofreplacementmigration
MaxFrisch(19111991)
ThomasHobbes
(15881679)
Lifeinthestateofnature is"solitary,poor,nasty, brutish,andshort. (Leviathan,1660)