Modelling the Demographic Dividend: A Review of Methodologies

Africa’s youthful population and significant development challenges have focussed the attention of researchers and policymakers on the demographic dividend—the potential boost to economic growth and living standards that may arise as the large youth population enters the prime working ages—and the type of supportive policy required to realise it. Policymaking in this area is challenging for a number of reasons: policies in key areas have long lead times, policymakers continually face the prospect of a variety of shocks over which they may have little to no control, and aggregate measures and statistics are unable to reflect the wide range of experiences, conditions and contexts within society. This paper provides an overview of some of the common tools and methodologies that are used to estimate and analyse the demographic dividend, while also reviewing the extent to which some of these methodologies are able to respond to the types of issues confronted by policymakers in the Eastern and Southern Africa region. Secondly, the paper provides a more detailed look at two of the key methodologies used to analyse the demographic dividend in the region, namely the DemDiv model and National Transfer Accounts (NTA).