Studies have shown that India entered a 37-year period of demographic dividend in 2018. The bulge in the working age population is going to last till 2055.
- Since 2018, India’s working-age population (people between 15 and 64 years of age) has grown larger than the dependant population — children aged 14 or below as well as people above 65 years of age.
- This bulge in the working-age population is going to last till 2055, or 37 years from its beginning.
- Many Asian economies — Japan, China, South Korea — were able to use this ‘demographic dividend.’
- Japan was among the first major economies to experience rapid growth because of changing population structure. The country’s demographic-dividend phase lasted from 1964 to 2004.
- In the 16 years between 1978 and 1994 (post-reform, pre-dividend) China saw eight years of double-digit growth.
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- Meaning: United Nations Population Fund (UNFPA) defines ‘demographic dividend’ as the growth potential that results from shifts in a population’s age structure.
- Reason: This transition happens largely because of a decrease in the total fertility rate (TFR, which is the number of births per woman) after the increase in life expectancy gets stabilised.
- Impact on growth:
- Studies show such periods are often marked by rapid economic growth. However this change in population structure alone cannot push growth. There are many other factors.
- In the late 20th century demographic dividend in Asia resulted in a seven-fold increase in the GDP of many countries. In Latin America the growth was only two-fold.
- Countries can only harness the economic potential of the youth bulge if they are able to provide good health, quality education and decent employment to its entire population.
Source: Economic Times