What is demographic dividend?

In News: India can achieve the goal of self-reliance (atma nirbharta) by enhancing the capability of youth.

About Demographic Dividend:
  • According to the United Nations Population Fund (UNFPA), demographic dividend means the economic growth potential that can result from shifts in a population’s age structure. The change in age structure is typically brought on by a decline in fertility and mortality rates.
  • India has one of the youngest populations (62.5% of its population in the age group 15-59) in an ageing world.
  • The demographic dividend leads to an increased labour supply that will increase the production of goods and boost savings and investment on the other.
  • The first demographic dividend occurs during the demographic transition process, when the working-age population increases as a share of the total population, and the percentage of both young and old dependents decreases.
  • The second demographic dividend results from an increase in adult longevity, which causes individuals to save more in preparation for old age. This increase in savings can thus contribute to capital accumulation and economic growth.
Major findings of United Nations Population Fund (UNFPA) on demographic dividend:
  • Demographic dividend phase in India: Report says availability of demographic dividend in India, started in 2005-06 and will last till 2055-56 based on the following facts:
    • India’s Population structure: Close to 30% of India’s population is in the age group 0-14 years. The elderly in the 60-plus age group are still a small proportion (8%) of the country’s population. The working age group 15-59 years’ accounts for 62.5% of India’s population. The working-age population will reach the highest proportion of approximately 65% in 2036.
    • Regional variations in the degrees and timings of fertility decline: Reports also highlight that demographic dividend is not available in all the states at the same time because Northern states are predominantly youthful whereas southern and western states are maturing.
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