Insights into the demographic dividend and the window of opportunity: a conceptual overview

Abstract

The demographic dividend presents the conceptual framework through which changes in the population's age structure positively affect economic development. However, the demographic dividend is a complex concept, and, more than two decades after its inception, approaches remain diverse. This paper presents a literature analysis on the demographic dividend to understand the concept of the demographic dividend and its relationship to its interrelated term ̶ the demographic window of opportunity. The literature analysis was undertaken following an evolutionary approach, including an examination of definitions of the demographic dividend and methodologies for its assessment. Two different approaches to view the demographic dividend, the demographic and the economic, were discussed, as well as the two indicators – the demographic support rate and the economic support rate. The results of the analysis confirmed the presumption of the demographic dividend and the demographic window of opportunity as being two distinct concepts – mutually interrelated but not substitutable. Also, for the analysis of the demographic dividend, the demographic support ratio indicator is as necessary as the economic support ratio, influencing the policy – making process at the national level in achieving the demographic dividend. The study underlines the importance of distinguishing between the concept of the window of opportunity that is created by demographic change and the demographic dividend – the positive economic outcome of these changes. Employing the concept of a window of opportunity, directly linked to the demographic dividend, would create the integrative framework needed to identify the pathways of positive demographic influence on economic development.