Is the Demographic Dividend in Fact an Education Dividend?

Wolfgang Lutz, International Institute for Applied Systems Analysis (IIASA)
Jesus Crespo Cuaresma, International Institute for Applied Systems Analysis (IIASA)
Warren C. Sanderson, Stony Brook University, State University of New York (SUNY)

We will use new data on populations cross-classified by age, sex and four levels of educational attainment for some 140 countries from 1960 to 2010 as estimated by IIASA/VID. These data have recently been used to demonstrate for the first time unambiguously that increases in human capital are a key driver of economic growth (Lutz etal., Science 2008,Vol.319:10047-48). In this paper we will apply similar models to the above described panel data to study the interactions between changes in the age structure of the population and its educational structure with respect to their effect on economic growth. Since in many countries the decline in youth dependency ratios occurred simultaneously with the improvement in educational attainment of the adult population we will study which of these factors has been more important in generating the observed economic growth that under the traditional demographic dividend approach is exclusively attributed to changing dependency ratios.