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Demographic Dividend Task Force

What is called Demographic dividend is the benefits that economies would be likely to take out of a particular phase of the demographic transition during which numerical evolution of different age groups leads to maximize the proportion of people in employment, source of wealth, and minimize correspondingly one of the non-working population, source of expenditure.

When a society enters the first phase of demographic transition (here denoted phase 1), she begins by recording a sharp decline in mortality while fertility - because behaviors have a certain inertia - remains stable or decreases only slightly. This gap between now low mortality and high fertility obviously always leads to a rapid increase in the workforce. Then gradually (phase 2), in turn the birth rate tends to decline and descends to the level of mortality, leading the country towards certain demographic stability or at least to a measured expansion.

When entering the second period, when fertility started to decline in the past few years, comes the opportunity of this demographic dividend supposed beneficial to the economy.
At that moment, indeed, three factors combine to reduce the part of non-working population and increase the people in employment, thus promoting the production of wealth while minimizing the weight of spending.
- Elderly people are limited in number (1).
- The number of young people starts to decrease (2).
- The number of people in employment is very important (3).
The first two elements reduce the proportion of dependents limiting spending on pensions, health care and education costs, the third maximizes the proportion of people likely to produce wealth for the economy, permitting to generate growth and finance expenses related to the first two categories.

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