Vietnam’s Demographic Dividend Projected to End by 2036

Vietnam’s demographic dividend, the economic boost from a large working-age population, is expected to end in 2036—three years earlier than projected in 2019—according to the General Statistics Office. This shift underscores urgent challenges as the country transitions to an aging society, with profound implications for labor markets, social welfare, and economic growth. The revised timeline, released in 2024, highlights a narrowing window for Vietnam to leverage its demographic advantage before the proportion of people aged 65 and over reaches 15%, marking the formal end of the dividend period.

Demographic Dividend Ends Sooner Than Expected

The demographic dividend period, defined as when the working-age population (15–64 years) outnumbers dependents (children and elderly), began in 2007 for Vietnam. During this phase, two working-age individuals supported every dependent, fueling economic expansion. However, the General Statistics Office now forecasts that by 2036, the 65-and-over population will reach 15%, ending the dividend era. This shift is driven by declining fertility rates and rising life expectancy, with the aging index—measuring older adults per 100 children—projected to rise from 60.2% in 2024 to 225% by 2074.

Nguyen Dinh Cu, a former director at the Institute of Population and Social Issues, emphasized the urgency of the situation. Vietnam has about a decade left to maximize its demographic dividend, he said, noting that the country has already benefited from 20 years of the period. The remaining 10 years, he argued, are critical for improving workforce quality, education, and labor productivity to avoid economic stagnation. “This could have serious implications for well-being, especially among older adults with limited resources,” warned Bussarawan Teerawichitchainan, an associate professor at the National University of Singapore, citing risks of increased income inequality and strain on healthcare systems.

Policy Measures and Their Limitations

In response to declining fertility rates, Vietnam enacted its first Population Law in July 2024, introducing incentives such as a €66 ($75) childbirth subsidy for select groups and extended maternity leave. However, experts question the effectiveness of these measures. The fertility rate fell to 1.91 in 2024, well below the replacement level of 2.1, while the working-age population is projected to shrink from 68.6% to 63% by 2050. “Fertility has continued to decline despite these efforts, suggesting that low fertility is driven by broader structural economic and social changes that cannot be reversed through pronatalist policies alone,” said Wiraporn Pothisiri, an associate professor at Chulalongkorn University.

The law also prioritizes social housing for families with two or more children and expands prenatal and newborn screening. Yet, these measures face challenges, including uneven pension and social-insurance coverage, particularly for Vietnam’s large informal workforce. “If countries age before becoming rich, economic growth may slow, while income inequality and pressure on healthcare and social support systems may increase,” Teerawichitchainan added, noting that Vietnam’s GDP per capita of $5,000 lags behind nations like Japan and South Korea during similar aging phases.

Regional Context and Comparative Challenges

Vietnam’s demographic shift mirrors broader trends across Southeast Asia, where falling fertility rates and longer lifespans are reshaping societies. Thailand, for example, saw its elderly population surpass children in the mid-2010s, while Singapore reached this milestone in 2010. Vietnam is projected to follow by 2035, creating a three-year overlap between its demographic dividend and aging society phases. “This overlap underscores the urgency of accelerating reforms to prepare for the country’s demographic transition,” said the General Statistics Office.

Regional responses vary: Thailand relies on migrant labor from neighboring countries, while Singapore prioritizes immigration to sustain its workforce. Vietnam, however, has a small immigrant population and shows little inclination to adopt large-scale migration. “Migration can help ease labor shortages in sectors such as construction, agriculture, and care work, though it also requires governments to strengthen migrant rights and access to services,” noted the Tempo article. With no clear alternative to immigration, Vietnam’s policymakers face a delicate balancing act between fostering domestic productivity and addressing labor shortages.

What Comes Next for Vietnam?

By 2034, Vietnam’s elderly population is expected to outnumber children for the first time, marking its official transition into an aging society. The country’s “super-aged” phase, defined as 21% of the population being 65 or older, is projected to begin in 2050. Demographers warn that without significant reforms, the working-age population will face mounting pressure to support a growing elderly cohort. “The number of people aged 65 and over is projected to rise from 9.4 million in 2024 to 20.5 million by 2044,” the General Statistics Office reported, citing a medium population scenario.

Experts urge Vietnam to focus on improving healthcare, pension systems, and workforce adaptability. Quality matters as much as numbers, Nguyen Dinh Cu said, stressing the need for investments in education and labor productivity. As the country navigates this transition, the success of its policies will determine whether it can avoid the economic pitfalls faced by other aging nations. “This could have serious implications for well-being, especially among older adults with limited resources,” Teerawichitchainan reiterated, highlighting the human cost of demographic change.

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