Demographic Dividend- Benefits and Challenges

demographic dividend

What is Demographic Dividend?

Demographic dividend refers to the economic growth potential that can result from changes in a population’s age structure, specifically when the share of the working-age population (usually considered to be between 15-64 years of age) is larger than the non-working-age population (below 15 and above 64 years of age). This can lead to an increase in the labor force and a potential increase in productivity, which can drive economic growth and development.

In countries with a large working-age population, a demographic dividend can occur if the workforce is well-educated, healthy and employed, allowing them to contribute to the economy and drive economic growth. This window of opportunity, however, is temporary and can only be realized if the right policies and investments are put in place to support the working-age population and address challenges such as aging, declining fertility rates and declining productivity.

The demographic dividend is an important concept for policymakers, as it can inform policy decisions on investments in education, health, and employment opportunities for the working-age population. The effective use of the demographic dividend can play a key role in promoting economic growth, reducing poverty, and improving the standard of living for people in a country.

According to World Bank:

According to the World Bank, that part of population in any country which is up to age of 14 and above age of 59 can be termed as dependent population. The population which is above the age of 14 and up to the age of 59 can be termed as productive population. According to UNO, the population of up to age of 14 and above the age of 64 can be termed as dependent population. On the other hand the population above the age of 14 and up to the age of 64 can be termed as productive population. When the productive population is more than the dependent population, then it is a phase of demographic dividend. India has entered its phase of demographic dividend. More than 50% of the population in India is below the age of 35. By the year 2020, the average age of Indians will be 29 years and India will be the youngest country in the entire world. By the same year, the average age of the people of the china will be 37 years and in japan it will be 48 years.

Benefits of Demographic Dividend:

When the productive population is high, it serves as human resource. For economic growth and development labour and capital are considered to be essential. If the productive population is high, one of these needs is fulfilled. Hence, India has surplus labour. In the developed countries the population is declining and also it is aging. In such a situation in near future the shortage of labour in these developed countries is bound to emerge. This shortage will be bridged by India. It is not only the case that the productive population only adds to the production through its contribution but it also senses as a consumer. This high consumption leads to investment and production. That is the reason why India is being seen as a huge market by the entire world. It has become an important destination for investment and trade. It increases even the political importance of India.


However, only the population being within productive age group may not be sufficient. Along with it even employment opportunities in sufficient quantity should be created. It leads to youth unrest and affect the socio-economic stability.

According Deepankar Gupta, India’s demographic dividend may turn into demographic demon. More than 30% of population in between the age of 15 to 29 years is unemployed. Even the census 2011 shows that 84 million illiterate in the country are unemployed. The employment opportunities in the large cities are getting stagnant and in the smaller cities they are not growing at the rate at which it is required. Hence, the cities with continuously increasing population and declining opportunities are witnessing increase in crime.

Note:-By the year 2030 the dependency ratio in india will remain 0.4 in. it is calculated by dividing the dependent population with the productive population.

Challenges of Ageing Population:

The elderly people constitute a part of the dependent population of the country. The elderly population itself suffers from a number of problem and the same time their increasing population leads to a number of problems in the country. At present, an average women in India lives high life approximately 69.9 years. On the other hand the life expectancy of men in India is 69.0 years. This continuous improvement is an important reason behind increasing population of the elderly people. According to the census of 2011, 6% of the total population in India was under this category. At present it is estimated to be 18% of the total population. It means that the increase will be rapid.

Other Challenges:

  • The problem of elderly can is associated with feminization of the entire issue and it can also be associated with ruraliasation. Since, women in India have a higher life expectancy; gradually the share of women in the elderly population is bound to increase. Hence, the term feminization can be used. The process of industrialization resulted in widespread migration from rural to urban areas. Since, it is easier to migrate with the small family, nuclear families are preferred and the youth migrate to urban areas leaving behind the elderly. It is leading to increase in the number of aging population in the rural areas. Hence, the term Ruraliazation of ageing.
  • Since the aging population is dependent population. Its impact over the economy can be seen. It affects consumption as well as production in the economy.
  • The elderly population is economically dependent; hence, their economic importance in the family declines. The social exchange theory states that social relationships are based on mutual benefits. Since the elderly may no longer be economically beneficial, they are ignored even in the family.
  • Generation gap is another issue associated with aging population. The people belonging to a particular generation may start belonging that their generation has been relatively letter as compared to any other generation. Hence, they start evaluating the other generations from their own perspective. (Temporocentrism) this leads to clash norms values and ideas.
  • The elderly population becomes biologically as well as socially vulnerable. Since the immunity declines a no. of ailments start emerging. Since, they may not be able to protect themselves their exploitation as well as crime against elderly increases.
  • With change in technology, the elderly people may not be able to adopt themselves accordingly. It leads to digital divide.
  • The elderly population may also suffer from psychology problems. Sometimes they start feeling that they are being ignored and have also become an economic burden over the family.

More Topics from Sociology

Definition of SociologyNature of Sociology
Power and Authority: Max WeberGeorge Herbert Mead: Symbolic Interactionism
Marriage in Tribal SocietiesVerstehen: Max Weber
Important Sociology Topics

Please leave your valuable feedback/suggestions. Share this article with your friends and other aspirants.

Follow us on Facebook: Here

Leave a Reply

Your email address will not be published. Required fields are marked *