global monitoring report 2015/2016 - world...

GLOBAL MONITORING

REPORT 2015/2016Development Goals in an Era of Demographic

Change

MARCIO CRUZ

DEVELOPMENT PROSPECTS GROUP

Global Monitoring Report 2015/2016

Implications of Demographic Change:

Pathways to Prosperity

Rapid population growth is set to continue in the

poorest countries over the coming decades.

In contrast, countries with low fertility rates,

including most high-income countries, have aging population structures.

Plan of talk

• A new demographic typology

• How demographics impact:

• Economic growth

• The achievement of development goals

• The nature of public transfers

Demographic Patterns: Stark Diversity across Countries

2

0

1

2

3

4

5

6

7

8

9

45 55 65 75 85

Life expectancy (years)

Pre-dividend Early-dividendLate-dividend Post-dividend

To

tal F

ert

ility

Ra

teCountries are at different stages of demographic transition

Defining a demographic typology

3

Growth of Working-

age Population

Share, 2015-30

Total Fertility Rate, 1985 Total Fertility Rate, 2015

< 2.1 ≥ 2.1 < 4 ≥ 4

<= 0 Post-dividend Late-dividend

>0 Early-dividend Pre-dividend

Note: The working-age population is defined as the share of the population aged between 15

and 64 years. Total fertility rate is the average number of births per woman in her lifetime.

Criteria for the demographic typology:

Demographic Patterns: Stark Diversity across Countries

4

The world can be divided into pre-, early-, late- and post-dividend countries

Most low-income countries are pre-dividend while most high-income

countries are post-dividend

5

0

5

10

15

20

25

30

35

40

45

Pre-dividend Early-dividend Late-dividend Post-dividend

Low-income countries Lower-middle-income countriesUpper-middle-income countries High-income countries

0

10

20

30

40

50

60

70


70 percent of the global population lives

in early- and late-dividend countries

Most pre-dividend countries are low-income while

most post-dividend countries are high-income

Sh

are

of g

lob

al p

op

ula

tion

, 2

01

5 (

%)

Nu

mb

er

of co

un

trie

s, 2

01

5

Global development and demographic disparities

6

Ave

rag

e p

ove

rty h

ea

dco

unt ra

te a

nd

sh

are

of g

lob

al p

ove

rty,

pe

rce

nt

0

10

20

30

40

50

60

Pre-dividend Early-dividend Late-dividend

Average poverty headcount rate

Share of global poverty

0

10

20

30

40

50


LIC LMC UMC HIC

Co

ntr

ibu

tion

s to

glo

ba

l G

DP

gro

wth

, 2

00

0-1

4 (

pe

rce

nt)

87 percent of global poverty is in

pre- and early-dividend countries

78 percent of global growth was from

late- and post-dividend countries

Centers of global poverty Engines of global growth

Demographic transition is associated with geographic distribution of

population within countries

7

10

20

30

40

50

60

70

80

1990 2013


Early-dividend countries are urbanizing

rapidly

10

20

30

40

50

60

70

80

1990 2014

Pre-dividend Early-dividend Late-dividend

A large share of the population of early- and late-

dividend countries still lives in slums

Share

of

popula

tion liv

ing

in u

rban a

reas

(%)

Share

of

urb

an p

opula

tion

livin

g in s

lum

s (%

)

Fertility rates and life expectancy have converged

8

1

2

3

4

5

6

7


1950-1955

2010-2015

30

40

50

60

70

80


1950-1955

2010-2015

Fertility rates in late-dividend

countries have converged to those of post-

dividend countries since the 1950s

Differences in life expectancy across

typologies of countries have narrowed

To

tal fe

rtili

ty r

ate

Lif

e e

xpecta

ncy (

years

)

Prospects of development and demographic disparities

9

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0


1980-2015 2015-50

An

nu

al g

row

th o

f p

op

ula

tio

n 1

5-6

4

(pe

rce

nt)

0

5

10

15

20

25

30

1950 60 70 80 90 2000 10 20 30 40 2050


Global working-age population growth will be

dominated by the centers of global poverty

Aging already advanced or accelerated in

the engines of global growth

Sh

are

of p

op

ula

tio

n, a

ge

s 6

5+

(%

)

Demographic change can boost growth

10

-4

-2

0

2

4

6

8

-10 0 10 20 30Ave

rag

e a

nn

ua

l ch

an

ge

in

re

al G

DP

p

er

ca

pita

, 1

96

0-2

014

Change in the share of the working-age population, 1960-2014

• An increase of 1 percentage point in

the working-age population share is

estimated to boost GDP per capita by

1.1 to 2.0 percentage points, on

average.

• An increase of 1 percentage point in

the share of working-age population

is associated with an increase of 0.6

to 0.8 percentage point in savings.

A rising working-age population share is

positively correlated with GDP per capita

growth

12

0

10

20

30

40

50

60

70

80

90

100

EAP SAR SSA

Child dependency ratio

1990 2012

0

10

20

30

40

50

60

70

80

90

100

EAP SAR SSA

Poverty headcount

1990 2012

Lower child-dependency ratios are

associated with lower poverty rates

Changing demographics can step up development

• A reduction of 1 percentage point in the

child dependency ratio is associated

with a reduction of 0.38 percentage

point in the poverty rate.

Pe

rce

nt

T60 population tend to have lower child-dependency ratios than B40

population in countries in all income categories

13

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

NE

R

UG

A

TC

D

BF

A

MO

Z

MD

G

ML

I

BD

I

MW

I

AF

G

TG

O

TZ

A

ZA

R

GIN

RW

A

ET

H

CO

M

GN

B

NP

L

LB

R

SL

E

HT

I

B40 T60

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

CM

RM

RT

SE

NY

EM

SD

NK

EN

SW

ZG

TM

PA

KC

OG

GH

AS

TP

CIV

DJI

NG

AB

OL

NIC

HN

DB

GD

CP

VZ

MB

SL

VIN

DL

SO

BT

NK

SV

LK

AM

AR

AR

MM

DA

GE

OU

KR

B40 T60

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

AG

O

IRQ

GA

B

BW

A

JO

R

PA

N

PR

Y

DO

M

ME

X

ZA

F

CO

L

EC

U

PE

R

TU

R

BR

A

CR

I

TU

N

AL

B

MN

E

MU

S

BL

R

BIH

RO

M

BG

RB40 T60

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

ISL

SW

EU

RY

NO

RA

RG

SY

CN

LD

DN

KF

INF

RA

IRL

CH

LG

BR

BE

LC

HE

LU

XA

UT

ML

TD

EU

CZ

EIT

AH

RV

CY

PS

VN

HU

NE

SP

LT

UR

US

PR

TP

OL

ES

TL

VA

SV

KG

RC

B40 T60

a. Low-income countries b. Lower-middle-income countries

c. Upper-middle-income countries d. High-income countries

Child

-de

pend

ency r

atio

Child

-de

pend

ency r

atio

Labor income still supports substantial consumption for 65-year olds,

while 75-year-olds rely mostly on public transfers or asset-based flows

14

-0.5 0 0.5 1 1.5

ArgentinaIndia

IndonesiaMexico

PeruPhilippines

South AfricaBrazilChile

ChinaCosta Rica

ThailandUruguay

GermanyHungary

JapanSlovenia

Korea, Rep.Spain

SwedenTaiwan (China)

USA

Share of consumption at age 65

Labor income Private transfers Public transfers Asset-based flows

-0.5 0 0.5 1 1.5

ArgentinaIndia

IndonesiaMexico

PeruPhilippines

South AfricaBrazilChile

ChinaCosta Rica

ThailandUruguay

GermanyHungary

JapanSlovenia

Korea, Rep.Spain

SwedenTaiwan (China)

USA

Share of consumption at age 75

a. Age 65 b. Age 75

Making the most out of demographic change

15

0.8 0.5

-0.2 -0.6 -0.3

-1

0

1

2

3

4

5

Pre-dividend Early-dividend Late-dividend Post-dividend World

Other sources ofgrowth

Net impact ofdemographicchange

2.8

3.2

4.2

1.62.1

0

10

20

30

40

50

Pre-dividend Early-dividend World

2015 2030 WB target

Average GDP per capita (annualized) growth over

2015-2030, percentage points

Global poverty will likely be concentrated

in Pre-dividend countries

Ave

rag

e G

DP

pe

r ca

pita

(a

nn

ua

lize

d)

gro

wth

, 2

01

5–3

0 (

pe

rce

nta

ge

po

ints

)

Povert

y r

ate

at $1.2

5 a

day (

%)

Thank You

Global Monitoring Report 2015/2015

www.worldbank.org/gmr

Questions or comments?

S. Amer Ahmed ([email protected]) &

Marcio Cruz ([email protected])

16

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