Youth Bulges and Youth Unemployment in Developing Countries

The transition from age structures dominated by children to age structures concentrated in working ages may have mixed economic consequences. The “demographic dividend” may be an important contributor to economic growth. But the path to the demographic dividend must pass through the “youth bulge,” with increases in the proportion of younger workers potentially increasing youth unemployment and social unrest. We analyze the economics and demography of the youth bulge –how youth demography is changing and how it affects youth unemployment – using data for 154 countries. We show that the simple relationship between youth bulges and youth unemployment across countries and within countries over time is very weak. Estimating regressions including year fixed effects and country fixed effects, however, we find a strong positive relationship between the youth share of the working-age population and youth unemployment. This suggests that the youth bulge may be an important factor in youth unemployment.