The Demographic Dividend: Retrospect and Prospect

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At least for sub-Saharan Africa (excluding South Africa), the proximity or otherwise of a neo-Malthusian limit is largely beside the point. The immediate problem is one of capital dilution: economies in the region are not saving nearly enough to maintain wealth per capita given current rates of population growth. The sustainability of consumption per capita is therefore under threat, quite independently of limitations on the supply of natural capital. As we have seen, the other aspect of low saving is its implication for investment and employment generation. To the extent that capital inflows are small and investment is directed to capital-intensive sectors (or to the expansion of capital-intensive production within, say, agriculture), the expanding workforce in the region will face higher unemployment and the potential for a substantial demographic dividend will be reduced.

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