ABSTRACT
This chapter discusses the first and second demographic dividends in Asia. The first demographic dividend is an advantageous situation during the first demographic transition, wherein the share of working-age population is high and that of the dependent population is low. The second demographic dividend is the effect of demographic change on growth in labour productivity. The second dividend is important in terms of capital accumulation and human capital. In this chapter, first, the definitions of these two demographic dividends are explained in relation to demographic transition. Next, the chapter reviews previous studies investigating the first dividend and introduces estimates of its magnitude. Then, this chapter explains the second dividend in relation to the effects of age structure and life expectancy on capital accumulation, and the effects of demographic change on human capital. Additionally, estimates of the second dividend in Asia are presented. Finally, policies that help take advantage of first and second dividends are discussed.
