Demographic Dividend: Definition

  • According to United Nations Population Fund (UNFPA), demographic dividend means, “the economic growth potential that can result from shifts in a population’s age structure, mainly when the share of the working-age population (15 to 64) is larger than the non-working-age share of the population (14 and younger, and 65 and older)”.
  • With fewer births each year, a country’s working-age population grows larger relative to the young dependent population. With more people in the labour force and fewer children to support, a country has a window of opportunity for economic growth if the right social and economic investments and policies are made in health, education, governance, and the economy.

Demographic Dividend in India

  • India has one of the youngest populations in an aging world.
  • A study on demographic dividend in India by United Nations Population Fund (UNFPA) throws up two interesting facts.
  • The window of demographic dividend opportunity in India is available for five decades from 2005-06 to 2055-56, longer than any other country in the world.
  • This demographic dividend window is available at different times in different states because of differential behaviour of the population parameters.

Declining Fertility:

  • The smaller share of children in the population enables higher investment per child , therefore the future entrants in the labour force can have better productivity.
  • With passage of time, the share of the older population rises and that of working age population start to decline and hence the dividend is available for a period of time, “the window of demographic opportunity”.


Forward Looking Policies:
  1. Undertake an updated National Transfer Accounts assessment. The NTA data for INDIA needs to be updated to capture the progress made on demographic investments
  2. Increase investments on Children and adolescents particularly in nutrition and early childhood education.
  3. To make health investments, the public spending on health has remained flat at around 1% of GDP.
  4. To make reproductive healthcare services accessible on a rights-based approach
  5. India needs to increase female workforce participation in the economy. As of 2019, 20.3% of women were working or looking for work down from 34.1% in 2003-04.
  6. Address the diversity between the states, Southern States already have a higher percentage of older people, this offers an opportunity for the states to work together.
  7. There is need for new approach to governance reforms to address the emerging issues such as migration, ageing, skilling, female workforce participation and urbanization.

Source: THE HINDU.