Education and South Africa’s waning demographic dividend

Abstract

South Africa’s demographic dividend is waning, with the vast majority of the positive impact of the dividend estimated to lie in the past. This paper considers improvements in education across the population and the potential impact of such improvements on the demographic dividend using the National Transfer Accounts (NTA) methodology and three sub-groups of the population defined according to educational attainment. The data suggests that simply accounting for rising educational attainment leads to a larger estimate of the demographic dividend, and that the effect of education is sufficiently strong to outweigh the negative effect of population ageing on the demographic dividend over the next five to six decades. More rapid improvements in educational attainment are estimated to yield a stronger demographic dividend, although the dividend period is slightly shortened.