Demographic transition and economic growth in Benin Barthlmy Biao - - PowerPoint PPT Presentation

Barthélémy Biao and Benin Team

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Demographic transition and economic growth in Benin

Contents

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• 1. Introduction
• 2. Data

3.Principal results 4.Conclusion and project plans

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The mean demographic dividend growth rate resulting from changes in the age structure of the population of a country (Bloom et al., 2002). A demographic dividend occurs when the drop in the birth rate leads to changes in the age distribution of a population.

• 1. Introduction

Meaning and importance of demographic dividend

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The demographic transition, or the point at which the rate of birth and death moves from a high level to a low level, is a critical stage of development opportunities for families and countries. If countries can plan and make necessary investments in young people during the demographic transition, they can create a virtuous circle of improving education, human capital, and the financial sector, and by extension economic productivity (Mason, Lee and Lee, 2008). What about the demographic dividend in Benin?

Country Information (2007)

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Lifecycle Deficit Asset-based Reallocations Net Transfers Age Reallocations

( ) ( ) ( ) ( ) ( ) ( )

l a

C a Y a Y a S a a a  

 

                   

Total population (thousands) 8,407,482 Population growth rate (%) 3.01 Total fertility rate (TFR) 5.31 Life expectancy at birth (years) 56 Child dependency ratio 83 Old‐age dependency ratio 5 GDP per capita, PPP annual growth (%) 1.51 Official exchange rate (local currency unit per USD, period average) 6.1

Population by Age, 2007

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50000 100000 150000 200000 250000 300000 350000 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90

Total Age Source: UN Population Program

The age structure of the population indicates that as the age increases, the size of the population by age decreases. People age 52 and over are a very small proportion of the total compared to the age group 16–48 years. Children age 0– 16 are a large group. The size of the population aged 16–48 years is less than the sum of the child and elderly population.

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1,00 2,00 3,00 4,00 5,00 6,00 7,00 8,00 1950‐1955 1955‐1960 1960‐1965 1965‐1970 1970‐1975 1975‐1980 1980‐1985 1985‐1990 1990‐1995 1995‐2000 2000‐2005 2005‐2010 Taux en unité Périodes

Evolution du taux de fertilité moyen au Bénin

Taux de fertilité au Bénin

5 10 15 20 25 30 35 40 1950‐1955 1955‐1960 1960‐1965 1965‐1970 1970‐1975 1975‐1980 1980‐1985 1985‐1990 1990‐1995 1995‐2000 2000‐2005 2005‐2010 Taux Périodes

Evolution du taux de mortalité total (pour 1000 Hbts)

Taux de mortalité (/1000Hbts)

Fertility and Mortality Rates Are Dropping

Benin experienced increasing fertility from 1950 to 1990, when it reached a peak of 7 children per woman. Then from 1990 to 2010, the the fertility rate declined. Mortality declined continuously over the period 1950–2010. We have to keep in mind that low and declining fertility is largely associated with increasing human capital investment.

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The window of opportunity for the demographic transition has begun for Benin. However, productivity in the working-age group will scarcely keep up with the cost of consumption by the elderly and children if public policies are not implemented. This is indicated by the profiles of consumption and production throughout the economic lifecycle.

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• Household Data survey EMICoV (Integrated Modular Survey of Living

Conditions of Households: INSAE, 2007). EMICoV provides information on households and their members and some information

• n labor market
• Data from national accounts for 2007 (INSAE,2013)
• School enrollment, primary, public by age and level (INSAE, 2009:

Social dashboard)

• budget for the health sector in 2007
• Health sector statistics, 2010
• 2. DATA

DATA (Continued)

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 Report on Strategy for Growth and Poverty Alleviation,

2007 : Estimating health costs by program

 Survey of World Population Prospects (2013)

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• 3. PRINCIPAL RESULTS

Per Capita Labor Income Profiles, Smoothed

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100000 200000 300000 400000 500000 600000 700000 800000 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90

(XOF, 2007)

Age

YLE_mean_sm YLS_mean_sm YL_mean_sm

Young people begin to work at age 16 in self-employment and informal activities. Income increases with age evolves to a peak at age 48, but the shape of the curve indicates that only a few in this age group have a high income. From age 49 labor income drop steadily with age, but with a slight increase in income from self- employment.

Per Capita Private Health Expenditure Profile

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5000 10000 15000 20000 25000 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90

(XOF, 2007)

Age

CFH_mean CFH_mean_sm

Children and the elderly have higher healthcare consumption than the working-age population

Per Capita Private Education Expenditure Profile

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5000 10000 15000 20000 25000 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90 XOF, 2007 Age

CFE_mean CFE_mean_sm

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Public Expenditures Profiles (Cge, Cgh And Cgx) by Age, Smoothed

10000 20000 30000 40000 50000 60000 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90

XOF, 2007

Age

CGE_mean_sm CGH_mean_sm CG_mean_sm

The government invests with partners in the education and health of young

• people. Health programs are concentrated on children age 0–5 years. There is

little public spending on healthcare for the elderly.

Aggregate Consumption Expenditure Profiles

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10 20 30 40 50 60 70 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90

(Billion, XOF)

Age

CF_Agr CG_Agr C_Agr

Children, adolescents and young adults have high consumption, based

• n health and education consumption. Consumption then declines

steadily with age.

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Per Capita Consumption and Labor Income Profiles

100000 200000 300000 400000 500000 600000 700000 800000 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90

(XOF, 2007)

Age

C_mean_sm YL_mean_sm

Labor income equals consumption age ages 29 and 64. The age group 30– 63 produces more than they consume, while the younger and older age groups consume more than they produce.

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10 20 30 40 50 60 70 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90

(Billion, XOF)

Age

C_Agr YL_Agr

Aggregate Consumption and Labor Income Profiles

In Another Form…..

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• 30
• 20
• 10

10 20 30 40 50 60 70 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90

(Billion, XOF)

LCD C_Agr YL_Agr

First Demographic Dividend Estimated

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• 1.00
• 0.80
• 0.60
• 0.40
• 0.20

0.00 0.20 0.40 0.60 0.80 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 Percent Year

The First Demographic Dividend, BENIN, 1950-2050

Since 1999, Benin has enjoyed a demographic dividend .

Benin’s Lifecycle Deficit

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Deficit age 0 to 29 1,248.20 Surplus age 30 to 61 ‐397.51 Deficit age 62 + 27.68 Total deficit 1,275.88 Total surplus ‐397.51 Difference 878,37

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• 4. Conclusion and Project Plans

Benin can enjoy its demographic dividend until 2100. Before 1990, the value of the first dividend was negative. The dependency ratio was still high and the nonworking population was a burden to the workforce. The window of

• pportunity is available between 1990 and 2100. Over this

period, the first dividend is estimated at 0.25%. It should reach its peak between 2020 and 2030 with an estimated average of 0.50%. This implies that the guidelines on demographic policy must take into account the dynamics of the age structure in

• rder to implement efficient policies.

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Public investments in the education of young people is low, and there is significant private education spending. Educational programs should primarily aim at harmony with the labor market. The expansion of jobs could contribute significantly to economic growth. Currently, the deficit generated by young people may significantly reduce domestic savings and hence the availability of capital for investment to support economic growth.

1. Release of SAM for Benin, 2007 2. Estimation of BENIN’s lifecycle deficit financing

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Project Plans