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‘Demographic dividend’ refers to the positive impact on economic growth that is generated by a relatively low and falling ratio of dependants to workingage population. The supply factors required for the economic growth of a country increase when the dependency ratio falls and the working-age population rises. The so-called demographic dividend is delivered through rapid increases in the labour force, a high rate of return on capital and more efficiency in labour force reallocations, which are all conducive to economic growth.

China’s Shift from the Demographic Dividend to the Reform Dividend