The economic life cycle and the demographic dividend under the NTA approach, evidence from European countries

Abstract

This article aims to realize a comparative analysis of the potential demographic dividend and the economic life cycle profiles for several European countries. The demographic dividend is a concept that denotes the positive demographic impact on economic development resulting from the changes in population age structure. Countries where the working-age population predominates have the opportunity to accelerate economic development, thus obtaining the demographic dividend. In estimating the potential demographic dividend, the NTA methodology found its applicability through the economic support ratio indicator, a composite indicator that includes the characteristics of the population structure by age group, and also the production and consumption profiles for each of the age groups. The difference between consumption and income constitutes, the deficit or surplus of the economic life cycle. The comparative analysis of the consumption and income profiles, the surplus and deficits of the economic life cycle, the economic support ratio indicator, and the demographic dividends in the selected countries were carried out. The research results show that, although some countries register a population structure beneficial to economic development, the profiles of the economic life cycle are heterogeneous, reflecting the different situations in the labor market and individual productive behavior. Identifying the drivers needed to improve life cycle surplus would provide the necessary support for identifying country-specific methods for achieving the demographic dividend. The article was elaborated within the State Program Project (2020-2023) 20.80009.0807.21 „Migration, demographic changes, and situation stabilization policies”.