Population Growth, Changing Age Structure and its Economic Consequences in Iran: Decomposition and Analysis of the Share of Age Groups

Population growth and changes in age structure both are the most important consequences of demographic transition. how the interaction between these two important variables is resulted from fertility and mortality, and in turn affects national economy is a question which has not been answered in previous researches. Examining the age details of the effect of demographic changes on the economic growth rate, the purpose of this article is to provide an answer to this question. To do this, the population growth rate has been aggregated into age-specific growth rates and using the age profiles of production and consumption, the impacts of the weight and changes of population by age segments on the first demographic dividend have been estimated and analyzed. The findings show that the share growth rate, which indicates both the size and the changes of population of each age, is capable to represent the effect of phenomena such as baby boom, and population momentum on the amount of Iran's demographic dividend. Also, almost simultaneously with the age transition, a demographic-economic transition is taking place due to the interaction of the economic life cycle and the change in the age structure. The results show that the decrease in the population of age groups under 30 years old, during a period from the middle of the first phase to the middle of the third phase of the age transition, makes an important contribution to the negative growth of the effective number of consumers and the increase of the population of prime age adult (30-49 years old) leading to the positive growth of the effective number of producers per consumers and, as a result , the realization of the first demographic dividend in Iran.