Demographic window of opportunity, first and second demographic dividends: evidence from the world

Current trends in population age composition led to increased interest in the potential economic impact of these trends. “The demographic window of opportunity” and “demographic dividend” present the two phenomena that address these concerns from an optimistic viewpoint. Over a certain period, a particular configuration of the population’s age structure when the working-age population predominates - the “demographic window of opportunity”- can create incentives for economic development, thus obtaining the demographic dividend. This paper aims to compare the demographic window of opportunity period and demographic dividend manifestation in selected countries from various parts of the world. The growth rate of support ratio was used to identify the demographic window of opportunity. The methodology for estimating the demographic dividend is that proposed by the NTA project. In addition, within NTA methodology, it is possible to capture both accounting and productivity aspects of the impact of the population by age group and differentiate the demographic dividend into the first and second demographic dividend. Hence, although manifested in an ageing population, certain economic behaviours, such as increasing savings and investments, can positively influence economic development, thus obtaining the second demographic dividend. This article presents evidence from selected countries on the demographic window of opportunity period as well as the first and second demographic dividends. It concludes by underlying the importance the demographic window of opportunity concept for the demographic dividend analysis.