The effect of education on the demographic dividend: an analysis of the Brazilian case

Abstract

The demographic dividend has aroused interest among demographers and economists because it is seen as a window of oportunity for the economic development of countries that have experienced a demographic transition. There are reasons to question the sole virtuosity of the pure demographic dividend in economic growth. Crespo-Cuaresma et al. (2014) found that educational expansion has an important role in economic gains during the demographic dividend. To verify these results for the Brazilian case, we performed a decomposition exercise of economic support ratio (ESR), an alternative to demographic dependency ratio, to analyze the first demographic dividend. A simulation, applied for the period from 1970 to 2100 considering three scenarios of educational expansion, shows that educational expansion was and will be responsible for a big share of the economic gains of the Brazilian demographic dividend period, outperforming the change in age structure effect. In addition, an increase in a work-age population with post-secondary education appears to potentialize these results.