Harnessing a young nation's demographic dividends through a universal NDC pension scheme: a case study of Tanzania

Author(s)
Larsson, Bo
Leyaro, Vincent
Palmer, Edward
Date Issued
August 5, 2019
Subjects
Capitale umano
Economia dello sviluppo
Pensioni
Abstract
About one-half of Africa’s population will remain below age 30 well past 2050, with relatively few aged 60 and older. Using Tanzania’s projected demographics and present economic point of departure, this paper demonstrates how the implicit “double” demographic dividend can be harnessed to create inclusive growth. A Swedish-style nonfinancial defined contribution (NDC) system is launched where the government can borrow funds from the future through NDC “consol” bonds to transform individual savings into human and physical capital to promote inclusive economic growth. The consol bonds constitute a reserve to cover pensions of the retiring “demographic bubble” in the future as the dependency ratio gradually glides into demographic equilibrium. Minimum transfers to the current elderly are also introduced with the phase-in.
Citation
Larsson B., Leyaro V., Palmer V. (2019), Harnessing a young nation's demographic dividends through a universal NDC pension scheme: a case study of Tanzania, Roma, INAPP, WP, n. 33 <https://oa.inapp.org/xmlui/handle/20.500.12916/471>
URI
Type
Working Paper
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