The relationship between population change and economic growth remains a subject of debate among economists and demographers. They continue to disagree about whether population growth (a) restricts, (b) promotes, or (c) is independent of economic growth. Proponents of each view can point to research evidence to support their cases.

The utility of this debate has been hampered by its almost exclusive focus on populationsizeandgrowth. Little attention has been paid to a critical variable: theage structureof the population (that is, the way in which the population is distributed across different age groups) and how it changes...

This chapter examines the “demographic transition” that all countries experience as social and economic development progresses, discusses the mechanisms by which its impacts are felt, and highlights the opportunity for economic growth—the “demographic dividend”—that this transition offers to developing nations.

In much of the developing world, a demographic transition is under way, accelerating with the declines in mortality that began near the end of World War II. Improvements in medicine and public health—for instance, the introduction of antibiotics such as penicillin; treatments for diseases such as tuberculosis and diarrhea; and the use of DDT, which helps control...

This chapter examines the interplay between population change and economic growth within specific regions of the world: East Asia; Japan; North America, Western Europe, Australia, and New Zealand; South Central and Southeast Asia; Latin America; the Middle East and North Africa; sub-Saharan Africa; and Eastern Europe and the former Soviet Union. The East Asian nations have experienced the most success in exploiting the “demographic dividend” made available by reduced fertility. Latin America has undergone a less dramatic transition and has had far less success in creating conditions for economic growth. The Middle East and North Africa are still in much...

As the case studies show, several key policy variables influence nations’ abilities to realize and exploit their “demographic dividend.” This chapter explores several of these: health policies to improve public health and access to care; family planning and related reproductive health policies to help families achieve their desired size; education policies to increase access to schooling; and economic policies that promote labor-market flexibility, openness to trade, adequate credit, and savings.

Improvements in public health are at the heart of the demographic transition. Improved sanitation, immunization programs, antibiotics, and contraceptives initiate the declines in mortality that lead to declines in fertility,...

Population neutralism, which has focused on the effects of populationgrowth, has encouraged economists to neglect demography when considering the future prosperity and development of the world’s countries. A focus on populationage structure, however, offers policymakers a vital tool as they plan for and manage the changes their countries face.

For developing countries, the demographic transition offers significant opportunities—opportunities that are unlikely to recur. They must therefore act soon to implement the policy mix required to accelerate the demographic transition and make its beneficial effects more pronounced. As mortality declines, policies to facilitate family planning and push down...