Demographic Challenges for Global Labor Markets in the 21st Century, Africa in a Changing World

Abstract

The world is projected to add 2.5 billion people to the total population and 1.1 billion people to the working-age population between 2020 and 2100. Almost all of the additional working-age people will be added in Sub-Saharan Africa, a dramatic change from previous decades, when the growth of the working-age population was concentrated in Asia. This chapter analyzes the demography of the African labor force in the coming decades using the latest United Nations population projections. We show that by 2050 Africa will be the only region in the world with a growing working-age population and will be the only region in which the ratio of dependents to working-age population is falling. These dramatic differences are the result of Africa’s later and slower fertility decline, with fertility still high in many African countries. Being the only region with a growing working-age population may create opportunities for investment and economic growth in Africa. This growing working-age cohort and especially its females have higher years of schooling than any previous generation. But the quality of their education still lags other regions. On the demand side, Africa needs to produce 2 million jobs per month by 2040 to keep up with the growth of the working-age population. This rate of job creation is similar to that produced in Asia during the period in which its working-age population was growing at similar rates. Still, this remains a daunting challenge for Africa in the coming decades. The dominance of the informal sector in all African labor markets, with the exception of a few upper middle-income contexts, implies that formally measured unemployment rates are not likely to provide telling metrics of African success. Rather, the focus for growth and improved development outcomes has to be on formal sector job creation alongside notably stronger linkages into the informal sector than has been the case to this point.