Iran’s Population Dynamics and Demographic Window of Opportunity

Iran’s Population Dynamics and Demographic Window of Opportunity
October 2017
Farzaneh Roudi
Pooya Azadi
Mohsen Mesgaran
Stanford Iran 2040 Project

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A sound understanding of Iran’s population dynamics is of paramount importance for understanding its potential for development in the long run. Herein, we discuss the past trends and future projections of Iran’s population dynamics and evaluate the contributions of its major determinants (i.e., fertility, mortality, and migration). We then discuss changes in women’s reproductive behavior and population age distribution and place Iran’s fertility decline in an international context through a comparative analysis. Subsequently, we explore the distribution and select compositions of the population at a provincial level. Finally, we discuss unemployment as well as the rising trend of young people pursuing education beyond high school and project the future educational attainments of Iranians.

According to the 2016 census, Iran’s population reached close to 80 million while its growth rate dropped to 1.2% a year—a rate similar to today’s world average but substantially lower than its peak a few decades earlier. Between the 1976 and 1986 censuses, Iran’s population grew from 34 million to nearly 50 million, corresponding to an average annual growth rate of 3.9% (3.2% from natural increase and 0.7% from net migration). A decade later, however, Iran surprised the world when the results of its 1996 census showed a rapid decline in the population growth rate due to a record fertility decline. In a mere ten-year period, the country’s total fertility rate declined from 6.2 births per woman in 1986 to 2.5 births per woman in 1996.   

Iran’s fertility decline stands out not only for its fast pace but also for occurring in the absence of a coercive government policy (e.g., China’s one-child policy) or the legalization of abortion (e.g., Turkey). Iran’s current TFR is estimated at 2.0–2.1 births per woman, which is close to the replacement level (i.e., 2.1 births per woman) but higher than the average TFR for the more-developed countries. The country’s fertility decline has had a significant impact on its age composition. The ratio of children (younger than 15) and elderly (65 and older) to the working age population (ages 15 to 65), known as the age dependency ratio, decreased from 0.95 in 1990 to 0.45 in 2005. With fewer dependents to support, Iran is currently in the midst of a demographic window of opportunity which will last about four decades before its working-age population starts to diminish in the mid-2040s. The opportunity must be seized now before the share of the working-age population shrinks and the population grows older.

Iran has reduced illiteracy among youths and has significantly increased its capacity for higher education. The total number of students enrolled at universities almost doubled between 2006 (2.3 million) and 2016 (4.3 million) with women constituting nearly half of student enrollments in higher education programs. By 2026, Iran is projected to accommodate a large number of highly educated people when more than half of the residents aged 25–34 are expected to hold a bachelor's degree or higher. Whether this positive trend in Iranians’ education will translate to economic growth is subject to uncertainty because of the chronic high unemployment rates. In fact, the tight job market has been a driving force for many graduates to continue their education beyond their bachelor’s degree.