Humanity remains young, despite all the talk
and time devoted to how old we're getting. There have never been so many young
people alive as are now. The earth's 1.8 billion young people, between the ages
of 10 and 24, according to a recently-issued UN report, represent 25% of humanity. Most of
the people living on this planet today have yet to reach age 30 and are transforming
the present, let alone the future. But adult policy-makers around the globe are
not supporting youth's fundamental needs and thus aren't doing much to take
advantage of the economic and social potential of this sizeable portion of
humanity.
Our youth population isn't equally dispersed across
the world's 196 nations, as 9 out of 10 young people live in less-developed
countries. Six nations' populations ,including Israel, are
"youthening" rather than ageing, meaning their median age is actually
declining. In Afghanistan and 15 countries in sub-Saharan Africa, half the
population is under 18. Other nations – most of them richer and developed – like
Japan and Germany are fast growing older and will soon experience the travails
of insufficient working-age/younger people.
China is an interesting example of a rapidly
aging country. Principally due to its one-child policy, within 5 to 6 years the
world's most populous nation will become older than the US. Because of China's
highly sex-selective abortion rates, it will have 96.5 million men in their 20s
in 2025 but only 80.3 million young women. This imbalance in its near-term
demography will present many challenges for the Communist Party elders.
Each nation has unique population
characteristics that can differ markedly from other countries. Figure 1
illustrates 3 demographic attributes of the 20 most populous nations on Earth,
which together account for slightly more than 5 billion people and 70% of world
population. These attributes are the nation's median age, youth (ages 15-24
years) population proportion and youth unemployment rate.
Another measure that represents the youth or
maturity of a nation's demography is the Potential Support Ratio, which indicates
how many working-age (15-64 years old) people there are for each post-65 year
old person. The higher this ratio, the greater the economic potential for the
nation, and the more likely the nation can afford the higher retirement and
health costs of its oldest people. Thus a lower ratio is detrimental with
respect to future growth or fiscal sustainability. More economists now believe
that "secular stagnation" is caused in part by fast-aging populations
where the working-age population is shrinking, like in Japan, Germany and other
nations.
Figure 2 shows the Potential Support Ratio for
these same 20 nations. As illustrated, the more mature nations' Potential
Support Ratios are much lower than the youthful nations. Japan's ratio is a
mere 2.4 – meaning there are 2.4 working-age people in Japan to support each 65+
year-old person. The US ratio is now 4.6; by 2050 it is forecast to be 2.8 when all the
baby boomers will have blown at (perhaps even blown out all) 65 candles on
their birthday cakes. By contrast, the Congo and Nigeria now have more than 18
working-age people to support each post-65 person. The 8-fold difference
between Nigeria's and Japan's Potential Support Ratios illustrates just how
dramatically dissimilar population characteristics can be between nations.
It's not mysterious what types of support
young people need from their governments in order to thrive. Spurred by youth,
the working-age population is expected to more than double in the
least-developed nations, especially in Sub-Saharan Africa. All nations, but
especially those with significant youth population, must invest in
youth-oriented health care, education and labor (HCEL) policies to support
their continued development and growth. Such policies can increase the
likelihood that these youthful nations can benefit from their up-coming
Demographic Dividend.
The demographic dividend is the accelerated economic growth
that may result from a decline in a country's mortality and fertility rates and
the subsequent change in the age structure of the population. With fewer births
each year, a country's young dependent population grows smaller in relation to
the working-age population. With fewer people to support, a country has a
window of opportunity for rapid economic growth if the right social and economic policies are offered and public and
private investments made.
In the past, this dividend has been realized
by many nations, including the US (with us Boomers in the 1960s and 1970s), and
later the Asian Tigers (Hong Kong, Singapore, South Korea, and Taiwan). Realizing
this demographic dividend, however, is never a certainty for any nation. The 5
most youthful nations shown in Figures 1 and 2 (based on their median age and
youth population percentage) – Congo, Ethiopia, Nigeria, Pakistan and
Philippines – have expended less than two-thirds as much on education and on
health care as the other 15 most populous nations. This lack of spending on key
HCEL policies means realizing the dividend is more unlikely for these countries.
These 5 most-youthful nations have over 123 million young people.
Americans don't need to travel to Ethiopia or
Pakistan to see the effects of such lack of spending in youth education and health care. You can
visit South Dakota's Pine Ridge Indian Reservation or any of the
mostly-forgotten, poor under-invested inner-cities of America to witness a glaring
lack of HCEL infrastructure that doesn't require a passport to behold.
Young people in Congo, Ethiopia, Nigeria,
Pakistan, Philippines and other nations, as well as in places closer to home
like Pine Ridge, require substantial health care and education funding to
thrive and to capture the benefits that accrue from realizing their countries' demographic
dividend. Unfortunately for the world's 1.8 billion young people, where this needed
funding will come from remains a mystery.
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