Study: “Demographic Trends, Economic Growth and Distribution Dynamics”
PI(s): Bussolo, Maurizio
Co-PI(s): De Hoyos Navarro, Rafael E.; Medvedev, Denis; van der Mensbrugghe, Dominique; Horowitz, David S.
Affiliation(s): World Bank
Data Source(s): Household Survey Data
Methods: Global Income Distribution Dynamics (GIDD) Model
Geographic Location(s): Cross-Country Analysis
Fertility decline in much of the developing world has led to changes in dependency ratios, the size of labor force and spending and savings behavior. This has been called a “demographic dividend”, as workers become a larger share of the population and the scope for savings and per-capita income growth is boosted. When these larger cohorts of young people reach old age, this trend is expected to reverse.
This study analyzes the economic impacts of a delayed or a quickened decline in fertility rates in developing countries. Specifically, the study tests three hypotheses: delay of the decline in fertility rates during the next two decades will:
- Increase income inequality and slow poverty reduction;
- Slow the increase in urbanization rates;
- Strain education systems, making Millennium Development Goals more difficult to achieve
Bussolo, Maurizio, De Hoyos, Rafael & Medvedev, Denis. (2008). Is the Developing World Catching Up? Global Convergence and National Rising Dispersion (World Bank Policy Research Working Paper No. 4733).
Bussolo, Maurizio, De Hoyos, Rafael & Medvedev, Denis. (2010). Economic Growth and Income Distribution: Linking Macroeconomic Models with Household Survey Data at the Global Level. International Journal of Microsimulation, 3(1): 92-103.