The age structure of the population refers to the proportion of persons in different age groups relative to the total population.

It changes in response to changes in levels of development and the average life expectancy. With development, quality of life improves and life expectancy increases, resulting in an ageing of the population where relatively smaller proportions are found in younger age groups and larger proportions in older age groups.

The age structure is relevant for economic development because a bias towards younger age groups offers a potential advantage known as the demographic dividend. This arises when the current generation of working-age people is relatively large, and it has only a relatively small preceding generation of old people to support.

However, this potential can be converted into actual growth only if the rise in the working age group is accompanied by increasing levels of education and employment. If new entrants to the labour force are not educated, their productivity remains low. If they remain unemployed, they become dependents rather than earners.

Thus, a changing age structure cannot guarantee any benefits by itself; it needs to be consciously exploited through planned development and appropriate policies.