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Ms. Rina Bhattacharya, Tarik Yousef, and Mr. Pierre Dhonte
The working age population is expected to grow faster in the Middle East than in any other region in the world between now and 2015—rising annually by 2.7 percent, or 10 million people. This demographic explosion presents the region with a major challenge in terms of providing jobs, incomes, and housing for the growing population, but the expanding labor force can also be seen as an opportunity to generate higher per capita income growth on a sustainable basis. The paper concludes by emphasizing the importance of market-friendly institutions in turning the challenge into opportunity.
Ms. Rina Bhattacharya, Tarik Yousef, and Mr. Pierre Dhonte

Front Matter Page Middle Eastern Department Contents I. Introduction II. The New Demography of MED III. MED’s Demographic Gift IV. Employment Opportunities V. Housing Construction as an Engine of Growth VI. Policy Implications Tables 1. Selected Regions: Key Population Data, 1970, 2000, 2015 2. Selected Regions: Age Structure of the Population, 1970, 2000, 2015 3. Selected MED Countries: Employment, 1973–2015 4. Selected MED Countries: The Augmented Demographic Gift 5. Selected MED Countries: Total Factor Productivity Growth

Ms. Rina Bhattacharya, Tarik Yousef, and Mr. Pierre Dhonte

in the 21 st century. Already, fertility rates have experienced a sharp decline in a number of countries and the overall growth rates are projected to decelerate gradually over the next 25 years. Equally significant, the demography of MED will be shaped by the trends in age structure: the expanding bulge in the middle and the shrinking younger tail in the age distribution of the population. The share of the working age group in the total population has been rising from 52 percent in 1970 to 57 percent today, a trend that is projected to accelerate in the next