Demographic transitions and economic miracles in emerging Asia

The demographic transition-a change from high to low rates of mortality and fertility-has been more dramatic in East Asia during the twentieth century than in any other region or historical period. By introducing demographic variables into an empirical model of economic growth, this article shows th at this transition has contributed substantially to East Asia's so-called e conomic miracle. The miracle occurred in part because East Asia's demograph ic transition resulted in its working-age population growing at a much fast er rate than its dependent population during 1965-90, thereby expanding the per capita productive capacity of East Asian economies. This effect was no t inevitable; rather, it occurred because East Asian countries had social, economic, and political institutions and policies that allowed them to real ize the growth potential created by the transition. The empirical analyses indicate that population growth has a purely transitional effect on economi c growth; this effect operates only when the dependent and working-age popu lations are growing at different rates. These results imply that future dem ographic change will tend to depress growth rates in East Asia, while it wi ll promote more rapid economic growth in Southeast and South Asia.