The Demography of the Labor Force in Sub- Saharan Africa David Lam Department of Economics and Population Studies Center University of Michigan Conference on Labor Markets in Western Africa: Evidence and Policy Lessons Abidjan, Côte d Ivoire November 2017
Some numbers to begin with The world has added 4.6 billion people since hitting 3 billion in 1960 About 3 billion were added to the working-age population since 1960 The world will add another 4 billion people this century, reaching 11 billion in 2011 3 billion will be in Sub-Saharan Africa 2 billion will be working-age, all in Africa 2 billion will be over age 65 Africa will need 2 million jobs per month by 2040 to keep up with the growth of working-age population
Goals of this talk Understand what drives these big demographic changes Look at the difference between 21 st century population growth and 20 th century population growth Look at the dynamics of demographic change in Africa Focus on implications for the labor force, employment, and economic growth
18 16 14 12 10 8 6 4 2 World population From 1960: World population doubled in 39 years The world added 4 billion people in 51 years This never happened before and will almost surely never happen again 1800: 1 Billion 2011: 7 Billion 1999: 6 Billion 1987: 5 Billion 1974: 4 Billion 1960: 3 Billion 1930: 2 Billion From 1950: UN World Population Prospects: 2015 revision 0 1800 1900 2000 2100
18 16 14 12 10 8 6 4 2 U.N. projections of world population to 2100 High, Medium, and Low Variants Increase of over 4 billion projected between 2011 and 2100 (about 3.6 billion from 2017) 2011: 7 Billion 1999: 6 Billion 1987: 5 Billion 1974: 4 Billion 1960: 3 Billion From 1950: UN World Population Prospects: 2015 revision 0 1800 1850 1900 1950 2000 2050 2100 16,6 11,2 7,3
2,5% 2,0% 1,5% 1,0% 0,5% 0,0% Annual growth rate of world population Pre-1950 estimates 2015 1.1% 1968 2.1% UN estimates and projections 0,8% 0,2% -0,5% -0,7% UN Population Division Estimates - 2015 revision -1,0% 1900 1950 2000 2050 2100
50 45 40 35 30 25 20 15 10 5 Crude Birth Rate Rate of Natural Increase 19,6 11,9 Crude Death Rate 7,7 per 1000 population Demographic Transition World, 1950-2015 0 1950 1960 1970 1980 1990 2000 2010
50 45 40 35 30 25 20 15 10 5 Crude Birth Rate Rate of Natural Increase 19,3 12,5 Crude Death Rate 6,7 per 1000 population Demographic Transition Southeast Asia 0 1950 1960 1970 1980 1990 2000 2010
60 50 40 30 Birth rate Demographic Transition Sub-Saharan Africa Rate of Natural Increase 37,9 27,7 20 10 Death rate 10,3 per 1000 population 0 1950 1960 1970 1980 1990 2000 2010
Births per woman 6 5 4 3 2 5,0 Decline of 82% relative to replacement fertility Total Fertility Rate World Decline of 50% from 1950 to 2015 2.5 1 UN Population Division Estimates - 2015 revision 0 1950 1960 1970 1980 1990 2000 2010 2020
8 7 Total Fertility Rate 6 5 5,1 4 3 2 1 East Asia UN Population Division Estimates - 2015 revision 2,5 2,1 1,6 0 1950 1960 1970 1980 1990 2000 2010 2020
9 8 7 6 5 4 3 2 1 Total Fertility Rate China UN Population Division Estimates - 2015 revision 5,7 Nigeria 5,1 2,4 1,8 1,6 0 1950 1960 1970 1980 1990 2000 2010 2020
8 7 6 5 Total Fertility Rate, UN projections SSA s fertility decline projected to be slower than other regions 4 3 2 1 East Asia UN Population Division Estimates - 2015 revision 2,2 1,8 0 1950 2000 2050 2100
Overview of last 50 years World population grew faster than it has ever grown before or ever will grow again. Broadly similar patterns of population change across developing countries. Key exception is slower fertility decline in Sub- Saharan Africa This period should be important in understanding links between population and development.
What happened to food availability and poverty during this period of unprecedented population growth?
350 300 250 200 150 100 World Food Production 1961-2014 (1961=100) 348 236 147 Food and Agriculture Organization - 2017 50 1960 1970 1980 1990 2000 2010
500 450 400 350 300 250 200 150 100 Africa Food Production 1961-2014 (1961=100) Food and Agriculture Organization - 2017 50 1960 1970 1980 1990 2000 2010 451 396 114
100 90 80 70 60 50 40 30 20 10 0 Percent in Poverty by Region, 1981-2012 80.6% 58.1% 19.7% South Asia 56.8% Latin America <$1.90 per day Sub-Saharan Africa East Asia 42.7% 18.8% 7.2% 7.6% 1980 1985 1990 1995 2000 2005 2010 2015 World Bank estimates
3,0 2,5 Number in Poverty (Billions) <$1.90 per day 2,0 1,5 1,0 0,5 0,0 2.0 Developing world 1.1 East Asia 0.9 0.5 South Asia 0.4 0.3 0.3 Sub-Saharan Africa 0.1 1980 1985 1990 1995 2000 2005 2010 2015
Lessons of last 50 years Unprecedented population growth did not lead to increases in starvation or poverty or stagnation in education Reasons Major technological advances Market responses Globalization Declines in fertility, increases in education Many caveats: Unequal outcomes across countries and within countries Environmental problems, climate change
21 st Century Demographic Change Comparison to 20 th Century Demographic Change Demography of Working-Age Population Implications for Employment and Development
Components of Population Growth Most current population growth is inertial growth from the population growth of the 1960s and 1970s Many countries already have replacement fertility, but they continue to grow The dynamics of the Demographic Transition mean that the components of growth will be very different in the 21 st century
4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 0 Increase in world population 1960-2100 (Millions) 394 877 1.274 713 752 Working Age 2,864 1.970 1.269 672 133 98 1960-2011 2011-2100 Elderly (65+) Older working (45-64) Middle working (25-44) Young working (15-24) Children (0-14) Working Age 2,074
Increase in population 1960-2011 (Millions) 4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 0-500 4,010 394 2.864 752 World 384 34 279 71 Latin America 2,540 233 1.908 647 20 343 399 284 Elderly Working Age Children 439 108 333-2 Asia SS Africa Rest of World
Increase in population 2011-2100 (Millions) 4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 0-500 -1.000 4,141 1.970 2.073 98 World Elderly Working Age Children 107 182-64 -11 Latin America 540 989-351 -97 3,132 526 2.106 500 360 272 13 75 Asia SS Africa Rest of World
4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 0-500 Increase in population 1960-2100 (Millions) 4010 4141 394 2.864 752 1960-2011 1.970 2.074 34 279 98 71 182-11 -64 2011-2100 Elderly Working Age Children 384 1960-2011 107 2011-2100 2540 233 1.908 399 1960-2011 540 989-352 -97 2011-2100 20 343 284 1960-2011 526 2.106 500 2011-2100 108 333 272-2 75 13 1960-2011 2011-2100 World Latin America Asia SS Africa Rest of World 647 3133 439 361
Implications for the Labor Market 20 th century population growth was characterized by rapid growth in children and youth This put pressure on schools and the youth labor market The global labor market in the 1970s and 1980s saw rapid increases in the number or young unskilled workers in developing countries Labor market dynamics are very different in the 21 st century
Billion 7 6 5 4 3 2 World working-age population, 1950-2100 4.6 billion in 2011, rising to 6.7 billion in 2100 Old (45-64) 1.4 billion in 2011, rising to 2.6 in 2100 Middle (25-44) 2.0 billion in 2011, rising to 2.7 in 2100 7 6 5 4 3 2 1 0 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 UN Medium variant projections 1.2 billion in 2011, rising to 1.4 billion in 2100 Young (15-24) 1 0
3 2,5 Sub-Sarahan Africa working-age population, 1950-2100 3 2,5 Billion 2 1,5 Africa s growth comes later 460 million in 2011, rising to 2.6 billion in 2100 Old(45-64) 2 1,5 1 Middle (25-44) 1 0,5 Young (15-24) 0 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 UN Medium variant projections 0,5 0
Components of Growth in the Working-Age Population Consider a simple accounting of the 15-64 age group New entrants in a year are those who turn age 15 People age out if they turn age 65 Some 15-64 year-olds also die, another source of exit These components determine the growth of the working-age population
Growth of working-age population, World 160 140 120 Net entrants peaked in 2005 at 84 million per year. Now falling rapidly; negative after 2100. Aging in Aging out 100 80 60 40 20 0 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 Millions Net entrants Deaths
Growth of working-age population, Asia 100 Net growth of 48 million per year (4 million per month) in 2005, now about 32 million and falling rapidly; negative in 2050 Millions 80 60 40 20 0 Aging in Net entrants -20 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 Aging out Deaths
Growth of working-age population, Latin America 12 Aging in 10 Aging out 8 6 4 2 0-2 -4 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 Millions Net entrants Deaths
Growth of working-age population, Sub-Saharan Africa 60 50 40 Net growth of 14 million per year in 2015, rising to 24 million (2 million per month) in 2040. Continues rising until 2060 Still positive in 2100 Aging in 30 20 10 0 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 Millions 2100 Net entrants Aging out Deaths
Number aging into working-age population, by region 160 140 World 120 Millions 100 80 60 Asia 40 20 0 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 SSA Rest of World Latin America
Net Entrant Population, by Region 100 80 60 40 20 0-20 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 Millions 2100 World Asia Rest of World Latin America SSA will be responsible for most of the growth of the world s working-age population by 2050, offsetting declines in Asia and Latin America. SSA
Increase in working-age population (15-64) over 15 year periods 60% 50% 40% 30% 20% 10% 51% 45% 41% 39% 32% 29% 27% 25% 14% 14% 54% 52% 53% 47% 47% 38% 36% 33% 26% 11% 1955-1970 1970-1985 1985-2000 2000-2015 2015-2030 0% World Latin America Asia SS Africa
10 9 8 7 6 5 4 3 2 Size of working-age population (Age 15-64, 1960=1) 1 0 1960 1970 1980 1990 2000 2010 2020 2030 Côte d'ivoire Ghana Nigeria Mali India Brazil
5,0% Annual growth rate of working-age population (Age 15-64) 4,0% 3,0% 2,0% Mali Nigeria Côte d'ivoire Ghana 1,0% 0,0% -1,0% -2,0% India Brazil -3,0% 1960 1970 1980 1990 2000 2010 2020 2030
Working-age 15-64 Annual growth rate Uganda Burkina Faso Kenya Senegal Mali Liberia Côte d'ivoire Nigeria Guinea Ghana India South Africa Brazil USA Germany China 1975 2015 0,0% 0,4% 0,1% 1,7% 1,5% 1,1% 3,9% 3,3% 3,3% 3,1% 3,1% 3,0% 2,9% 2,8% 2,8% 2,6% -3,0% -2,0% -1,0% 0,0% 1,0% 2,0% 3,0% 4,0% 5,0%
Growth of working-age population The world s working-age population will increase by 670 million (14%) between 2015 and 2030 We will need about 45 million jobs per year to maintain current employment rates Sub-Saharan Africa will need 1.7 million new jobs per month by 2030 This is a challenge, but: Working-age population increased by 960 million between 2000 and 2015, an increase of 25% Africa s working-age population growth of 53% in next 15 years is similar to growth in Latin America and Asia from 1970-85. Africa will be the only major region in the world with a growing working-age population by 2050
Age structure and the youth bulge Countries going through demographic transition go through a regular pattern of changes in age structure. They get young They get less young They get old Along the way there is a period with a high fraction in labor force (demographic dividend) The path to the demographic dividend must go through the youth bulge Potential impacts on youth unemployment and social unrest (Arab Spring, etc.)
Largest birth cohort born in 1982 Youth Bulge
Age Distribution, Nigeria, 1985 100+ 95-99 90-94 85-89 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 0,20 0,15 0,10 0,05 0,00 0,05 0,10 0,15 0,20 % Male % Female
Growth of working-age population, 2015-2030 70% 60% 50% 40% 30% 20% 10% 0% -10% Total 15-24 25-44 45-64 25% 14% 14% 9% 7% -4% 11% 34% World Latin America Asia Sub-Saharan Africa 11% -1% 5% 27% 53% 46% 53% 65%
Dependency Ratio (DR) Key component of Demographic Dividend Changes to the working-age cohort must be seen relative to dependent-age population Youth DR = Age 0-14 / Age 15-64 Elderly DR = Age 65+ / Age 15-64 Total DR = (Age 0-14 + Age 65+) / Age15-64
Youth Dependency Ratio = Age 0-14 / Age 15-64 Dependency Ratio 1 0,9 0,8 0,7 0,6 0,5 0,4 0,3 0,2 SSA 0,1 0 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 World
Elderly Dependency Ratio = Age 65+ / Age 15-64 0,7 0,6 Dependency Ratio 0,5 0,4 0,3 0,2 0,1 World 0 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 SSA
Total Dependency Ratio = (Age0-14 & 65+) / Age15-64 Dependency Ratio 1 0,9 0,8 0,7 0,6 0,5 0,4 0,3 0,2 0,1 0 World SSA 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 In 2057, SSA is projected to have a lower dependency ratio than Asia, Latin America, and the World, for the first time in nearly 100 years.
Youth Pop 15-24 Annual growth rate Uganda Burkina Faso Kenya Senegal Mali Liberia Côte d'ivoire Nigeria Guinea Ghana India South Africa Brazil USA Germany China 1975 2015-1,2% -0,2% -0,3% 0,6% 0,1% 3,6% 3,2% 2,6% 2,3% 3,4% 3,1% 3,0% 2,9% 2,6% 1,9% -3,0% -2,0% -1,0% 0,0% 1,0% 2,0% 3,0% 4,0% 5,0%
Youth Ratio = Age 15-24 / Age 15-64 Uganda Burkina Faso Kenya Senegal Mali Liberia Côte d'ivoire Nigeria Guinea Ghana India South Africa Brazil USA Germany China 0,24 0,21 0,16 0,18 0,28 0,28 0,41 0,38 0,36 0,37 0,39 0,35 0,37 0,36 0,37 0,34 1975 2015 0 0,1 0,2 0,3 0,4 0,5
Growth of youth labor force Many African countries have growth rates of over 3% per year in youth labor force this implies a doubling in less than 25 years These growth rates are not unprecedented, however. Similar growth rates were experienced by other developing countries in 1970s and 1980s Growth rates declined in other countries, however, but will remain high in Africa for several decades.
Major points Africa s demographic transition follows that of other regions, but fertility decline has been later and slower Youth populations have stopped growing in other regions, but continue to grow in Africa Africa will be the only region in the world with a growing working-age population and a falling dependency ratio by mid-century Africa will need 2 million jobs per month to keep up the growth of the working-age population by 2040 This is big challenge, but is similar to the challenges met in other regions in previous decades