The first and second demographic dividends in Moldova

Abstract

Moldova is going through a phase of intense demographic changes and is facing two major challenges: population decline and ageing, which significantly influence economic growth opportunities. The economic burden increase on the working-age population is one of the main concerns associated with demographic ageing. In this context, studying the impact of demographic changes on economic dynamics is of interest to academia and policymakers. Relatively new theoretical approaches −the first and the second demographic dividend concepts and the "economic life cycle" theory were used. The papers of foreign and domestic scientists acted as the theoretical information base of the study.This article presents the results of a study evaluating the demographic dividend for Moldova based on National Transfer Accounts and the demographic forecast for 2022-2040. The scientific papers of foreign and Moldovan researchers were used as the theoretical and informational basis for this study. To determine the demographic dividends, the methodology proposed by Mason and Lee was used; the calculations of demographic coefficients, the assessment of the age structure and its dynamics, and the formation of demographic dividends were carried out. The results of the study showed that Moldova still needs to catch the first demographic dividend. In the next two decades, the number of producers will decrease faster than the number of consumers. Favourable market changes in the demographic structure are practically exhausted, and Moldova is entering a period of depopulation. The evolution of the demographic dividend in Moldova is in line with regional trends. However, with an active policy to increase the population's economic activity and improve living standards, there is an opportunity to reap the benefits created by the second demographic dividend. In addition, it is necessary to diversify the investment opportunities for savings, which would contribute to the accumulation of assets and indirectly increase the fixed capital..