Youthful Populations Are Economic Assets That Lead to a Demographic Dividend
Definition
Demographic dividend
The demographic dividend is an accelerated economic growth that results from a specific shift in demographic structure caused by rapid decline in fertility. It occurs when past high fertility rates had resulted in a larger working-age population, while recent and fast decline in fertility reduced the number of young dependents.
- This boosts economic productivity, as a larger proportion of the population enters the workforce, increasing savings and driving innovation.
- However, this window of opportunity lasts only for a few decades, making timely investments in education, employment, and infrastructure critical.
A youthful population is one with a high proportion of young people, typically under the age of 15.
Opportunities of a Youthful Population
1. Growing Labor Force Drives Productivity
- A youthful population entering the workforce brings the potential to:
- Expand economic output, provided there are enough jobs available.
- Increase consumer demand, as young people spend on education, housing, technology, and leisure.
- Attract foreign investment, as companies seek large, skilled labor pools.
By 2025, India is expected to have the world's largest working-age population, providing a significant competitive advantage in global markets.
2. Innovation and Entrepreneurship
- Young populations often drive progress:
- Technological Advancements: Young minds are more adaptable and innovative in fields like renewable energy, AI, and healthcare.
- Entrepreneurial Growth: Youth are more likely to start businesses, fostering new industries and job creation.
Cities like Bengaluru and Hyderabad have become hubs for startups, driven by young entrepreneurs.
3. Long-Term Social Benefits
- With fewer dependents, families and governments can:
- Invest more per child, improving health and education outcomes.
- Increase domestic savings, leading to higher economic resilience.
