Research Paper Research in Population & Development in Africa - - PDF document

Research Paper

Research in Population & Development in Africa

XXVIII IUSSP International Population

29 OCT – 4 NOVEMBER 2017 CAPE TOWN, SOUTH AFRICA

Topic theme contributing towards for: The 28th international population conference, 29 October – 4 November 2017, Cape Town, South Africa Poster Session: Population & Development, Title of research project: The Demographic Dividend (Window of Opportunity) and It’s Impact on Labor Force, The Case of South Africa and Egypt, 1996-2013 By: Aliaa Abdelraouf Ali Amer Name: Aliaa Abdelraouf Ali Amer Sex: female Date of Birth: 24/03/1967 Nationality: Egyptian Country of birth: Egypt Country of Residence: Egypt

• E. mail: alia1_alia@yahoo.com–alia.ali.amer@gmail.com

Institution: Cairo Demographic Center (CDC) Current Job: Researcher at Cairo Demographic Center (CDC) Home address : Cell Tel. : : 77 street No. 9 – Mokattam Cairo , Egypt 0+201227997066 – +201112125125

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The Demographic Dividend (Window of Opportunity) and it’s Impact on Labor Force, The Case of South Africa and Egypt, 1996-2013

By: Aliaa Abdelraouf Ali Amer

• Abstract

This study aims at examining the extent to which South Africa and Egypt have reached the demographic Window within the current socio –Economic situation of the Population based on data from the censuses of the year 1976, 1986, 2006 for Egypt, and the censuses and labor force of the year 1996, 2001, and 2011 for South Africa, in both countries as well as their projections up to the year 2032. The study concluded that Egypt and South Africa have experienced considerable changes in its population age composition during the last four decades due to considerable declining trend in fertility levels. These changes in the age structure are expected to have great impact on future population needs in various spheres including education, health, labor force, aged population, and consequently on future developmental efforts and achievements. Both countries are expected to begin the demographic dividend within about two decades

after a significant fertility. The impact of changing age composition on the labor force is expected to increase labor force size by 8.5 million people in Egypt and 5.5 million people in

South Africa in the next 15 years.

• Introduction

The demographic dividend is the accelerated economic growth that may result from a decline in a country's mortality and fertility 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 developed and investments are made (PRB, 2012). Africa is expected to undergo substantial demographic changes in the coming decades with the rising working age share of its population. The opportunity of African countries to convert these changes into demographic dividends for growth and poverty reduction will

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depend on several factors. The result will likely be good if African countries can continue the gains already made under better institutions and policies, particularly those affecting the productivity of labor, such as educational outcomes.

• Research Problem:

According to the demographic transition theory both South Africa and Egypt are considered in its third phase. Hence, in this phase young cohorts are expected to become adults, join the labor force and earn income. As the dependency ratio continues to decline and the proportion of workers rises, so provides opportunities for economic growth. Therefore it is the phase that the economy has that unique opportunity to boost economic growth. This

• pportunity is available only for a limited time. Changes in age structures resulting from

declining fertility create a one-time "demographic gift", when the working age population has relatively few dependents, of either young or old age, to support. In this context it is important for both South Africa and Egypt to examine the extent to which they are able to achieve and utilize the window of opportunity for economic development within the current socio - economic situation of their populations.

• Objectives:

1- To examine the extent to which South Africa and Egypt have reached the demographic Window. 2- To carry out population and labor force projections by broad age group as well as labor force projections for both countries up to 2032

• Methods and data sources:

Methods are descriptive and analytical in which population projection will be carried out, the main sources of data used are the censuses of the year 1976, 1986, 2006 for Egypt, and the censuses and labor force of the year 1996, 2001, and 2011 for South Africa.

• Country background:

Arab Republic of Egypt is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country,

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and a major power in Africa, the Mediterranean region and the Islamic world. Covering an area of about 1,010,000 square kilometers (390,000 sq mi), Egypt is bordered by the Mediterranean Sea to the north, the Gaza Strip and Israel to the northeast, the Red Sea to the east, Sudan to the south and Libya to the west. Administratively, Egypt is divided into 27 governorates. The governorates are further divided into regions. The regions contain towns and villages. Each governorate has a capital, sometimes carrying the same name as the governorate. Four of these governorates are major 4 urban ones as to: Cairo, Alexandria, Port Said and Suez,9 governorates are located in Lower Egypt, 9 are located in Upper Egypt, and five are frontier governorates. According to the Egypt population census 2017 calculated population over 100 Million persons The Republic of South Africa occupies the most important country in all the south region in Africa, it is located attitudinally from 22° to 35° degrees south of the equator, and longitudinally from 17° to 33° East of Greenwich. South Africa Covering an area of about 12,190,90 square kilometers, the country has common boundaries with Zimbabwe, Botswana, and Namibia, South Africa is surrounded by the Atlantic Ocean to the west and the Indian Ocean to the East. Administratively, South Africa is divided into nine Province, and into four population groups, African, Asians, Coloureds, and whites, according to the South Africa population census 2011 calculated population was 50.8 Million persons.

• Demographic Transition in Egypt and South Africa

During the last few decades, Egypt initiated the ground for demographic take off as a result of the successful implementation of population policies and programs starting from the

• 1980s. The annual growth rate 2.08 percent in 1986-1996, and then slightly decreased to 2.05

in 1996 - 2006. However, the last period 2006 - 2013 has shown are verse trend in which the rate increased to reach 2.3 percent table (1). This unexpected and undesired increase comes consistent with other recent increases in fertility levels. Regard to South Africa, there have been three official censuses since it is first democratic election in 1994, the first official census was in 1996, and the second was 2001, the final one was 2011, the population of South Africa has been increased from almost 23.4

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million in 1985 to 40.58 million in 1996, and the annual growth rate was declined from 5.5 present to reach 0.19 present for the period 1996 – 2001. However, the annual growth rate is increase again in the last period for the official census by 1.44 present for the period 2001- 2011. Table (1) Population Size and Growth Rate, Egypt, 1976 –2013, South Africa 1985 - 2015

Egypt South Africa Year Population Size Million Period Growth Rate Year Population Size Million Period Growth Rate 1986 48,254 1986-1996 2.08 1985 23, 386 1985- 1996 5.51 1996 59,512 1996-2006 2.05 1996 40,584 1996 - 2001 0.19 2006 72,798 2006-2013 2.3 2001 44,826 2001 - 2011 1.44 2013 83,661 2011 51,770 Source: Calculated from CAPMAS, 1976- 2006 Population censuses of Egypt; Egypt in Figures, 2014, Statistics South African Census data 1996 -2011,

As indicated in table (2), the crude birth rate in Egypt declined from a maximum level

• f 38.6 per thousand in 1986 to reach a minimum level of 25.7 per thousand in 2006.

Unfortunately the rate increased again to reach 30 per thousand in 2011.The crude death rate also declined steadily from 9.2 in 1986 to reach its minimum level of 6.1 per thousand in

• 2011. Accordingly, the rate of natural increase declined from 2.94 to 1.93 percent in the same

period, but like the population growth rate the rate of natural increase has reversely increased to 2.42 percent in 2011. (CAPMAS,2013). With regarding to South Africa table (2) indicate also that the crude birth rate (CBR) declined from a maximum level of 35.8 per thousand between the period 1975 -1980 to reach a minimum level of 21.6 per thousand in 2011.The crude death rate (CDR) also declined steadily from 11.7 for the period 1975- 1980 to reach its minimum level of 8.6 per thousand in after 10 years. Unfortunately the rate increased again to reach the maximum level 15.2 per thousand in the period 2005 - 2010, and declined again to reach 11.3 per thousands in 2011. Accordingly, the rate of natural increase (RNI) declined from 2.4 to 0.7 percent in the same period, but like the population growth rate the rate of natural increase has reversely increased to 1.03 percent in 2011.

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From all above shown that the rate of natural increase for South Africa, have decreased by 1.37, while Egypt was not able to reach this percentage, it has been only decrease by 0.06 in the same period, which means that South Africa are going to achieve in the demographic dividend in the near future.

Table (2) Crude Birth Rate, Crude Death Rate and Rate of Natural Increase,

Egypt, 1976 – 2011, South Africa 1975 -2011

Egypt South Africa Year CBR CDR RNI Year CBR CDR RNI 1976 36.6 11.8 2.48 1980 ــ1975 35.8 11.7 2.4 1986 38.6 9.2 2.94 1990 ــ1985 31.1 8.6 2.3 1996 28.3 6.5 2.18 2000 ــ1995 25.1 10.4 1.5 2006 25.7 6.3 1.93 2010 ــ2005 21.9 15.2 0.7 2011 30.0 6.1 2.42 2011 21.6 11.3 1.03 Source: CAPMAS, Statistical Year Book, 2013 http://za,ask,com/wiki/Demographics_of_South_Africa

As a result of these recent changes in fertility and mortality levels, the population age structure has shown also similar changes particularly with respect to the percentage of children less than 15 years of age. As can be seen from table (3), this percentage declined from 37.7 percent in 1996 to 31.1 percent in 2013, while the percentage of the population in the working age 15-64 years and elderly 65+ increased from 58.9 and 3.40 percent in 1996 to 64.5 and 4.4 in 2013 respectively. Due to these changes the demographic dependency ratio declined steadily from 69.7 percent in 1996 to reach 55 percent in 2013. Table (3) Population Age Structure and Dependency Ratios, Egypt, 1976-2013, South Africa 1996 - 2011

Age Structure Egypt Age Structure South Africa Years 0-14 15-64 65+ Dependency Ratio Years 0-14 15-64 65+ Dependency Ratio 1996 37.7 58.93 3.40 69.7 1996 34.40 60.70 4.90 66.4 2006 31.7 62.21 6.08 55.0 2001 32.05 63.01 4.94 58.7 2013 31.1 64.5 4.4 55.0 2011 29.17 65.49 5.64 56.9 Source: Calculated from CAPMAS,1976- 2006 Population censuses of Egypt; Egypt in Figures, 2014, Statistics South Africa census data 1996 – 2011

According to the age structure and demographic dependency ratio in South Africa, the table indicate, the population at 0-14 age group this percentage declined from 34.4 percent in 1996 to 29.17 percent in 2011, while the percentage of the population in the working age 15-

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64 increased from almost 61 percent in 1996 to reach 65.5 percent in 2011, also the elderly 65+ increased from nearly 5 percent in 1996 to 5.6 in 2011. Due to these changes the demographic dependency ratio declined steadily also from 66.4 percent in 1996 to reach almost 57 percent in 2011. It is clear from this table also decrease the percentage of children (0-14), while the population increased percentages at working age (15-64), and the convergence of the elderly percentage in both countries at about the same time. All these changes are expected to continue influencing Egypt's and South Africa population age structure in the near future. Such expected changes will imply considerable impact on the development process particularly in education, nutrition, child health, health services, labor force, and aged population.

• Population Projections up to 2032

The Institute of National Planning has recently prepared governorate level population projections for Egypt up to the year 2032 the medium scenario of these projections assumes achieving the replacement level of fertility (2.1 children per woman) by 2032. These projections as presented in table (4) will be adopted in this paper for identifying the impact of changing age structure on development in Egypt. According to these projections, about 24 million people are expected to be added to the total population of Egypt by the year 2032 to reach 108 million. Due to the expected decline in fertility, as reflected in the projection assumptions. The percentage of children less than 15 years of age is expected to continue declining from 31.1 percent in 2013 to reach about 24.67 percent in 2032, while the percentages of the population 15-64 years of age and the aged population 65+ will increase to 67.4 and 7.95 percent respectively. Regard to the projections for South Africa by using Table (4) shown also almost 33 million people are expected to be added to the total population of Egypt by the year 2032 to reach 68 million. Due to the expected decline in fertility, as reflected in the projection assumptions, the percentage of children less than 15 years of age is expected to continue declining from 29.2

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percent in 2013 to reach about 24.1 percent in 2032, while the percentages of the population 15-64 years of age and the aged population 65+ will increase to 68.3 and 7.6 percent respectively. Table (4) Projected Population by Broad Age Groups, Egypt, South Africa, (2013-2032)

Years 2013 2017 2022 2027 2032 No % No % No % No % No % Egypt Age group 83.661 89.007 96.117 102.367 108.016 0-14 26.01 31.1 27.22 30.58 28.91 30.08 28.01 27.36 26.65 24.67 15-64 53.96 64.5 57.41 64.50 61.53 64.02 67.22 65.67 72.78 67.38 65+ 3.69 4.4 4.38 4.92 5.67 5.90 7.14 6.97 8.59 7.95 South Africa Age group 53,392 16,669 60,830 63,670 66,608 0-14 15,586 29.2 16,780 29.6 17,331 28.7 16,895 26.5 16,073 24.1 15-64 34,962 65.5 36,880 65.0 39,487 65.3 42,485 66.7 45,456 68.3 65+ 2,844 5.3 3,117 5.4 3,619 6.0 4,288 6.8 5,068 7.6 Source: Institute of National Planning, Governorate Level Population Projections and Major Demographic Indicators in Egypt, 2012-2032, Planning and Development Issues Series No. 221, 2010, *CAPMAS, Egypt in Figures, 2014 Calculated from the censuses data, 1996-2011

Based on these projections in Egypt, it is expected also that crude birth rate (CBR) may reach 15.9 per thousand, the crude death rate (CDR) may reach 5.8 per thousand and the rate of natural increase (RNI) will decline to reach1.01 percent in the year 2032 as shown in table (5). According to South Africa, the table shown also, it is expected that crude birth rate may reach 15.8 per thousand, the crude death rate may reach 7.0 per thousand and the rate of natural increase will decline to 0.87 percent in the year 2032. Table (5) Projections of Crude Birth Rates, Crude Death Rates and Rates of Natural Increase, Egypt, South Africa, 2017-2032

Projections of CBR, CDR and RNI, Egypt Projections of CBR, CDR and RNI, South Africa Year CBR CDR RNI CBR CDR RNI 2017 22.5 5.4 1.71 21.7 7.4 1.43 2022 19.4 5.3 1.40 18.9 7.1 1.18 2027 17.0 5.4 1.16 16.6 7.0 0.96 2032 15.9 5.8 1.01 15.8 7.1 0.87 Source: Institute of National Planning, Governorate Level Population Projections and Major Demographic Indicators In Egypt, 2012-2032, Planning and Development Issues Series No. 221, 2010 ,CAPMAS, Egypt in Figures, 2014 Calculated from Statistics South Africa census data, 1996-2011

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• The Demographic Dividend Challenges and Demands

The aforementioned projections up to 2032 and the changes analyzed through the whole period, indicate that Egypt and South Africa are moving towards the first phase of "the Demographic Dividend" which may happen to the country only once during the population life time and is considered as a demographic prize that should be taken seriously to maximize all the possible development gains. And for them to reach "the Demographic Dividend”, there are many challenges that should be faced and demands that should be fulfilled. One knows, that the starting point of time for the demographic dividend may be defined when the size of natural increase and dependency ratio are steadily declining, the size

• f the population less than 15 years start to decline, and the size of the working age

population is increasing . The ending point in time is determined when the size of the population in working ages 15-64 reaches its maximum value, or the dependency ratio starts to increase again, whichever comes first. And in this context, it's obvious, that the demographic dividend in Egypt is expected to begin occurring within about two decades after a significant fertility decline. Then it will continue as long as fertility rates continue declining. The most important implication of such situation is the achievement of maximum working population potentials and minimum dependency levels. Therefore, one of Egypt's major challenges is to succeed to achieve the targeted replacement level of 2.1 children per woman, which is assumed to be reached in 2032 according to the mediam scenario

• projections. At that point in time, it may be the time to open the window and get the

demographic prize, when the size of the population in the working ages reaches its maximum level and is ready to enter into the labor market. Just then, the demographic window might be

• pened for some time depending on the speed of fertility reduction.

In this, there is an urgent need for higher levels of skilled labor force. Improving child health specifically as well as improving the population characteristics generally are major

• interventions. Qualified education process, training programs, and good health status that help

provide the demanded skilled labor force in the future should be assured. The cost of child care programs is not an expense, but an investment in the future of the society. Breaking the poverty cycle through early childhood interventions requires a broader approach, which looks at development as a general process.

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The investment in children as a governmental intervention must be an immediate priority to avoid downstream costs in health, education, social problems, crimes, and lost

• productivity. This will help create a strong, healthy and well-educated generation of skilled

labor force in the near future.

• Labor Force Projections up to 2032

One of the important implications of the demographic dividend and the changes in the population age structure in Egypt and South Africa is that the percentage of the children less than 15 will decrease due to fertility decline. Consequently, the percentage of the population in the working age 15-64 will increase considerably from 64.5 percent in 2013 to 67.4 percent in Egypt and from 65.5 percent in 2013 to 68.3 percent in South Africa in 2032 as shown in table (4). According to the labor force projections, table (6) shows the projected labor force for both Egypt and South for the period 2017-2032 assuming that the levels of activity rates of the base year will continues during the projector period without change. As shown in table (6) the projected labor force size in Egypt is expected to increase from about almost 29 million in 2017 to 36.5 million people in 2032, such an increase of about 8.5 million persons in 15

• years. As regard to South Africa, the labor force size is expected to increase also by 5.5

million people in the same period. Table (6) Projected Labor Force, Egypt, South Africa 2017-2032,

2032 2027 2022 2017 country Total Labor Force Millions 36.51 33.72 30.87 28.80 Egypt 29.44 27.52 25.58 23.98 South Africa Source: Institute of National Planning, Governorate Level Population Projections and Major Demographic Indicators In Egypt, 2012-2032, Planning and Development Issues Series No. 221, 2010 *CAPMAS, Egypt in Figures, 2014 Calculated from Statistics South Africa (LFS), 1996-2011

• Conclusion

Egypt and South Africa have experienced considerable changes in its population age composition during the last four decades due to considerable declining trend in fertility levels. The percentage of children (o-14) in Egypt decreased by 6.6 percentage points to reach 31.1

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percent in 2013, while the same age group in South Africa decreased by only 5.5 percentage points to reach 29.2 percentage in 2011.In Egypt the percentage of the population in the working age (15-64) increased by 5.6 percentage to reach 64.5 percent in 2013. On the other hand this age group in South Africa increased also by 4.8 percentage points to reach 65.49 percent in 2011. As regards the percentage of the aged population in Egypt (65+) they increased slightly by only 1.0 percentage point to reach 4.4 percent in 2013, compared to 0.74

• nly in South Africa.

According to the recent population projections up to the year 2032, with the continuous fertility decline further changes in the age structure are expected to approach the first Demographic dividend. The young dependents (0-14) are expected to continue decline to reach about 25 percent in Egypt and 24.1 in South Africa, while the percentage of the working age population and the aged population are expected to increase to in Egypt 67.4 and 8 percent respectively, in South Africa there two age groups are expected to increase also to 68.3 and 7.6 percent respectively. Thus mean the aged population (65+) in Egypt and South Africa, is expected to exceed twice its size in the next 20 years to reach 8.6 million, and 5.1 Million in South Africa Respectively. In Egypt and South Africa the demographic dividend is expected to begin occurring within about two decades after a significant fertility decline .Then it will continue as long as fertility rates continue declining. If Egypt and South Africa succeeds to achieve the targeted replacement level of 2.1 children per woman, which is assumed to be reached in 2032 according the Medium scenario projections, then it may be the time to open the window and get the demographic prize, These changes in the age structure are expected to have great impact on future population needs in various spheres including education, health, labor force, aged population, and consequently on future developmental efforts and achievements. As regards the impact of changing age composition on the labor force, it is projected that the labor force size in Egypt will increase from 29 million in 2017 to 36.5 million in 2032, also the labor force size in South Africa will increase from 24 million in 2017 to reach 29 million person in 2032 This increase means that an additional 8.5 million people in Egypt and 5.5 million people in South Africa are expected to be included in the labor force in the next 15 years.

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