Attitudes Essay

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G1 (iii) What drove the so-called demographic ‘dividend’ in Ireland from around 1995 - 2005 Ireland Ireland also provides a recent example of the demographic dividend and transition. Faced with a high birth rate, the Irish government legalized contraception in 1979. This policy led to a decline in the fertility rate and a decrease in the dependency ratio. It has been linked as a contributing factor to the economic boom of the 1990s that was called the Celtic Tiger.[7] During this time the dependency ratio also improved as a result of increased female labor market participation and a reversal from outward migration of working age population to a net inflow. Notes: Demographic dividend - Labour supply Four mechanisms for growth in the demographic dividend During the course of the demographic dividend there are four mechanisms through which the benefits are delivered. The first is the increased labor supply. However, the magnitude of this benefit appears to be dependent on the ability of the economy to absorb and productively employ the extra workers rather than be a pure demographic gift. The second mechanism is the increase in savings. As the number of dependents decreases individuals can save more. This increase in national savings rates increases the stock of capital in developing countries already facing shortages of capital and leads to higher productivity as the accumulated capital is invested. The third mechanism is human capital. Decreases in fertility rates result in healthier women and fewer economic pressures at home. This also allows parents to invest more resources per child, leading to better health and educational outcomes. The fourth mechanism for growth is the increasing domestic demand brought about by the increasing GDP per capita and the decreasing dependency ratio.[13] Low fertility initially leads to low youth dependency and

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