what is demographic dividend 
demographic dividend refers to the growth in an economy that is the result of a change in the age structure of a country s population the change in age structure is typically brought on by a decline in fertility and mortality rates understanding demographic dividendwhile most countries have seen an improvement in child survival rates birth rates remain high in many of them particularly in lesser developed countries these countries therefore rarely enjoy an economic benefit known as the demographic dividend demographic dividends are occurrences in a country that enjoys accelerated economic growth that stems from the decline in fertility and mortality rates a country that experiences low birth rates in conjunction with low death rates receives an economic dividend or benefit from the increase in productivity of the working population that ensues as fewer births are registered the number of young dependents grows smaller relative to the working population with fewer people to support and more people in the labor force an economy s resources are freed up and invested in other areas to accelerate a country s economic development and the future prosperity of its populace to receive a demographic dividend a country must go through a demographic transition where it switches from a largely rural agrarian economy with high fertility and mortality rates to an urban industrial society characterized by low fertility and mortality rates in the initial stages of this transition fertility rates fall leading to a labor force that is temporarily growing faster than the population dependent on it all else being equal per capita income grows more rapidly during this time too this economic benefit is the first dividend received by a country that has gone through the demographic transition a decline in fertility and mortality rates boosts working population productivity which leads to a demographic dividend types of demographic dividendthe first dividend period generally lasts for a long time typically five decades or more eventually however the reduced birth rate reduces labor force growth meanwhile improvements in medicine and better health practices lead to an ever expanding elderly population sapping additional income and putting an end to the demographic dividend at this stage all else being equal per capita income grows at a decelerated rate and the first demographic dividend becomes negative an older working population facing an extended retirement period has a powerful incentive to accumulate assets to support themselves these assets are usually invested in both domestic and international investment vehicles adding to a country s national income the increase in national income is referred to as the second dividend which continues to be earned indefinitely the benefits gotten from a demographic transition is neither automatic nor guaranteed any demographic dividend depends on whether the government implements the right policies in areas such as education health governance and the economy in addition the amount of demographic dividend that a country receives depends on the level of productivity of young adults which in turn depends on the level of schooling employment practices in a country timing and frequency of childbearing as well as economic policies that make it easier for young parents to work the dividend amount is also tied to the productivity of older adults which depends on tax incentives health programs and pension and retirement policies there are four main areas where a country can find demographic dividends 