The growing aging population during the third phase of the demographic transition can create a slowdown in the country’s economic growth as the number of consumers (the older population) grows faster compared to productive workers.
How does demographic transition affect the economy?
Demographic changes can affect GDP growth through several channels. First, lower growth in population directly implies reduced labor input. … Therefore, if the share of elderly in the population rises, aggregate savings would fall, leading to lower investment growth, and, in turn, lower GDP growth.
What is demographic transition in the Philippines?
Countries such as the Philippines are experiencing a slow demographic transition with high birth rates and sluggish living standards. Filipinos must consider whether the 21st century will bring shortages of land, forests, water, fuel, and resources and a population hungry, crowded, and in need of stability and health.
What are the effects of demographic transition?
In summary, demographic change will result in a slower-growing and older population. This transition will likely put downward pressure on the growth rate of potential output, the natural rate of unemployment, and the long-term equilibrium interest rate.
Has the Philippines undergone demographic transition?
Where is the Philippines now in the demographic transition? With its population structure, the Philippines remains in the first phase of the demographic transition. By the year 2020, the country is projected to have a population of almost 110 million Filipinos.
What are the demographic issues in the Philippines?
These population figures highlight the following development issues: 1) an increasing number of jobs for the growing numbers of people in the working ages, 15-64; 2) lower productivity due to large numbers of young inexperienced workers; 3) larger numbers of retired people in relation to workers; 4) an imbalance in …
What stage is the Philippines in the demographic transition model?
Shown by the demographic transition model, the Philippines are in Stage 2. On the graph the births are high and the deaths are declining.
What is an example of demographic transition?
As of right now, countries like Afghanistan, Yemen, and Laos, amongst others, match this trend. As societies become more and more industrialized, they enter stage three of the demographic transition theory. By stage three, death rates are still low, but birth rates begin to decline as well.
Why is demographic transition important?
An important transition in the economic history of countries occurs when they move from a regime of low prosperity, high child mortality and high fertility to a state of high prosperity, low child mortality and low fertility. … As fertility rates fall, GDP increases, and as GDP increases, child mortality falls.