The Demographic Opportunity in Jordan


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Executive Summary

· Jordan is witnessing a decline in its high fertility rates, which can lead to a “demographic opportunity,” expected to occur in 2030 and last for 20 years. The demographic opportunity is when the proportion of working age population is at its greatest, while the proportion of dependency is at its lowest. This will have many benefits:

o Growing labor force and increased savings and GDP

o Lower dependency rates on working Jordanians

o Population decrease leading to decreased load on the country and services

· Policies should seek to:

o Accelerate demographic transition and reach demographic opportunity. Specifically, fertility should decrease to 2.1 by 2030, as discussed by the National Strategy, in order to gain the benefits of demographic opportunity

o Prepare for the post-demographic opportunity society and economy

· Limiting the demographic study to Jordanians (excluding Iraqis) does not significantly affect predictions

Key Findings

Jordan’s Population Status

· According to the last census, the population growth declined to 2.5% down from 4.4% in 1994 with 7% of the growth due to non-Jordanians

· The fertility rate has decreased with 3.6 children/woman of child-bearing age in 2009 down from 5.6 in 1990s. This is particularly driven by increased use of contraception and an increase in age at first marriage due to female education

· Jordan’s population is young with 38% of population under 15 and 58% between 15-64 years (work age) (2007 Census)

· While the 2009 dependency ratio is 66 persons per hundred work age individuals, the ratio is even higher when considering only 20% of Jordanians actually work making real dependency ratio 5:1

Projected Demographic Opportunity and Expected Effects

· The conditions for the projected ‘demographic opportunity’ are a working age population 69% of total population and a dependency ratio of 45/100 working individuals, on par with European countries

· Based on 2007 projections, the demographic opportunity will take effect by 2030 only if the birth rate decreases to 2.1

· A decreased birth rate of 2.1 is needed to extract the most benefits from the demographic opportunity in 2030 as this will ensure:

o Lowest total population (1.3 million fewer people by 2030 and 4.6 million by 2050 vs. no change in fertility rate) and lowest population growth rate

o Most desirable age structure, bulge among working age and small percentage of youth and elderly, leading to best organization of the labor market

o Lowest dependency ratio

· The labor market will have to create new jobs for the new pool of workers

o If fertility rate does not decrease, more jobs will need to be created each successive year because there will be more adults in the labor force

o A total of 170,000 jobs are needed by 2050 given fertility rate decrease, or a total of 220,000 jobs if the fertility rate does not decrease

Recommended Actions and Initiatives

Policies to help maximize the Demographic Opportunity

· Invest in Health

o Promote family planning to achieve target birth rate of 2.1 by 2030

o Raise awareness about population issues

· Invest in Education and Higher Education

o Discuss family planning in education

o Establish Higher Council for Human Resource Development to improve the coordination of quality education and vocational training

o Improved career guidance for students in secondary school

o Increase research on population issues

· Improve female workforce participation

Policies to Benefit from the Demographic Opportunity

· Expand the labor market and improve its flexibility

o Improve the alignment of the higher education system with the needs of the workplace

o Change attitude towards vocational/technical training and increase training programs

o Strengthen the role and contribution of the private sector in in policy formation and priority setting

o Further improve the Social Security Act to maximize labor force participation

· Increase economic openness

o Restructure the public sector workforce to be more efficient

o Increase scientific research and technology transfer

o Enter into international agreements to strengthen Jordanian exports in global market

· Mobilize savings to stimulate investment

o Improve investment environment and increase competitiveness

o Encourage investment in rural areas, SMEs, and development zones

o Encourage business community to diversify direct investment and maximize its employment

· Expand social protection policies, including social welfare, community development programs, and corporate social responsibility

Prepare for Post-Demographic Opportunity

· Emphasize the need to cover the elderly in social security initiatives

· Support efforts to develop new insurances, e.g. unemployment insurance and maternity insurance

· Engage in pension reforms to make pensions sustainable

 

Report Name

Date

Timeline

The Demographic Opportunity in Jordan

October 2009

Projections until 2050

Author

Supporting Donor

Higher Population Council

None

Sector

Lead Ministry

Human & Social Development

Not Available

Key Topics

Demographic Opportunity – Dependency Ratio – Fertility Rates – Family planning – Labor Market – National Strategy – Population Growth – Social Protection for Elderly –Technical Work – Training – Work Age

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