FOREWORD 4

EXECUTIVE SUMMARY 6

CHAPTER 1 DEMOGRAPHIC TRENDS AND THE FUTURE OF GROWTH 12

Introduction 14

Setting the stage: demographic trends 16

Population structure and economic growth 20

Policy levers to counteract the economic impact of demographic decline 24

Conclusions and policy implications 34

CHAPTER 2 FERTILITY IN TRANSITION 46

Introduction 48

Fertility trends across the EBRD regions 49

Breaking down fertility declines: first-time births versus higher-order births 53

Economic drivers of fertility 58

Pro-natalist policies 61

Cash benefits have transitory effects on fertility 63

Conclusions and policy implications 65

CHAPTER 3 DEMOGRAPHIC CHANGE AND THE QUEST FOR TALENT 76

Introduction 78

A more educated workforce 79

Age-friendly jobs and the employment of older workers 80

Skills and the adoption of artificial intelligence 83

Uneven AI adoption at firm level 86

The quest for foreign talent 88

Stimulating entrepreneurship in young societies 94

Conclusions and policy implications 97

CHAPTER 4 THE POLITICAL ECONOMY OF DEMOGRAPHIC CHANGE 110

Introduction 112

Responding to ageing: a difficult political economy 114

Generational divides: preferences of older and younger people 117

Reconciling polarising opinions and attitudes in a society 123

Conclusions and policy implications 132

CHAPTER 5 STRUCTURAL REFORM 142

Introduction 144

Assessment of Iraq 147

Recent changes in scores 148

Focus on economic integration 150

Conclusions 155

ABBREVIATIONS 158

ACKNOWLEDGEMENTS 159