Optimizing the “demographic dividend” in young developing countries: The role of contractual savings and insurance for financing education

Abstract

Many developing regions are facing a youth bulge, meaning that young people comprise the highest proportion of the population. These regions are at risk of losing what could be a tremendous opportunity for economic growth and development if they do not capitalize on this young and economically productive population - also referred to as the “demographic dividend,” defined as the increase in economic growth that tends to follow increases in the ratio of the working-age population - essentially the labor force - to dependents. Nations undergoing this population transition have the opportunity to capitalize on the demographic dividend if the right social, economic, and human capital policies are in place. In particular, sub-Saharan Africa, the Middle East, and North Africa are at risk of losing the demographic dividend. These regions face high youth unemployment, low primary school completion, and low secondary school enrollment. This results in an undereducated and unskilled segment of the population. The prohibitive costs of education prevent young people from finishing school, thereby entering the labor market unprepared. This article presents a case for youth-focused financial inclusion programs as one of the antidotes to the masses of poor, undereducated, and low-skilled young people swelling the labor markets of poor developing countries.

Examining the nonkin support networks of orphaned adolescents participating in a family‐based economic‐strengthening intervention in Uganda

“…These programs combine conditional cash transfers with assetbuilding strategies, which enable individuals with limited financial and economic resources to acquire and accumulate long-term productive assets (Lagarde, Haines, & Palmer, 2009;Ssewamala, 2015). These programs combine conditional cash transfers with assetbuilding strategies, which enable individuals with limited financial and economic resources to acquire and accumulate long-term productive assets (Lagarde, Haines, & Palmer, 2009;Ssewamala, 2015).…”

“…In communities heavily affected by HIV/AIDS, economic-strengthening programs have been implemented to assist vulnerable children and families affected by the disease. These programs combine conditional cash transfers with assetbuilding strategies, which enable individuals with limited financial and economic resources to acquire and accumulate long-term productive assets (Lagarde, Haines, & Palmer, 2009;Ssewamala, 2015). In particular, economic strengthening is needed for families and caregivers to meet the expanding responsibilities for both ill family members (e.g., medical care needs) and orphaned children living within or joining the household.…”

Applying a Family-Level Economic Strengthening Intervention to Improve Education and Health-Related Outcomes of School-Going AIDS-Orphaned Children: Lessons from a Randomized Experiment in Southern Uganda

“…For developing countries to register maximum socioeconomic benefits from the youth bulge, they will have to invest in human capital development, including education (Eastwood & Lipton, 2011; Lutz & Samir, 2011; Ssewamala, 2014). In addition to the importance of education and its role in economic growth, including development of a skilled labor force (Barro, 2013; Bloom, Canning, & Chan, 2006), education is a protective factor for healthy adolescent and youth development (Santelli, Lowry, Brener, & Robin, 2000; Shann et al, 2013).…”

Do Savings Mediate Changes in Adolescents' Future Orientation and Health-Related Outcomes? Findings From Randomized Experiment in Uganda

“…However, this argument—advanced by asset theory (described earlier) has not been extensively tested specifically among adolescents whose decisions early in life are likely to impact them for many years to come [30]. Thus, this paper: 1) tests the impact of a family economic strengthening intervention, Suubi-Maka, on future orientation and psychosocial outcomes of adolescents orphaned by AIDS; and 2) ascertains the extent to which accumulation of financial assets (through savings) mediates the observable intervention effects.…”