Demographic dividend of Ghana: The National Transfer Approach

Abstract

Clarifying and managing demographic changes are central to national economic planning. Yet, how to measure the demographic transition can be fiendishly difficult. This paper breaks new grounds by using the National Transfer Accounts Approach to estimate the lifecycle deficit and the first demographic dividend for Ghana in 2005. The results of the National Transfer Accounts for Ghana indicate that, lifecycle surplus runs for about 30 years and peaks around age 50. Further, there is early entry into and late exit from the labour force, probably due to significant unregulated labour market activities in Ghana, particularly in the informal economy. The results reveal that Ghana started enjoying her first demographic dividend in 1990 and is expected to peak around 2031. The paper proposes some policies geared towards strengthening the labour market which potentially would develop the human capital particularly in the productive ages to help sustain the benefits.