In addition to a less benign external environment, Asia also faces structural shifts that impinge on long- term economic growth. Above all, the first demographic dividend – a major contributor to growth in the past – is coming to an end. The first demographic dividend refers to the accelerated economic growth associated with a rise in the share of people of working age in the total population. That rise leads to an increase in per capita income; hence, for a given saving rate, the rise in the share of working- age people leads to an increase in consumption per person, that is, to a higher living standard. The first demographic dividend is not, however, an automatic consequence of favorable demographics; it depends on the ability of the economy to use the additional workers productively. The success of East Asian economies in creating policy environments conducive to taking full advantage of their demographic dividends played a major role in the
East Asian miracle.