Lets take a closer look. Projection models, particularly of the Brics variety, typically operate by deriving demographic dividends from inevitable consequences of savings, fertility patterns, age structure of populations and labour force numbers. The results are striking, and it is important to understand which of the results are robustand why. Some of these studies may turn out correct, for example, but for the wrong reasons. The future is not inevitable. And dividends will only be garnered by the brave who have a strategic vision of human development in operation.
By the projections for 2050, differences between, say, India and Japan or Spain are large. India will have far fewer retired people. Consequently, 4.4 workers would support a retiree in India, but only 1.4 in Japan/Spain. This is good for India. Some years ago, we had done work on this for the United Nations Universitywhich was published later by The Indian Econometric Society. What it showed, in retrospect, is the frailty of grand long-term projections.
Studies tend to be like that. Some of the outcomes come about by definitions, and these are robust, but others are based on assumptions and therefore need scrutiny. The robust fact that even if output per worker does not change, output per capita would grow if the growth rate of workers exceeds the growth rate of the total population (the difference between the two growth rates being critical), comes from definitions. This is a demographic dividend and its robustness comes from the fact that it takes place even if worker productivity growth does not rise. The size of the difference could vary, though, depending on the numbers you predict based on what the demographers are sayingso, be careful of the Greeks who bring gifts. They were wrong earlier, and could be so again.
During demographic transition, another kind of bonus can accrue which I once called the sweetest bonus. The time spent by women in bearing and raising children falls while mortality decline lengthens the life span remaining after the cessation of childbearing. In India, the age at first-birth could be 22 years or more (less than 20 now), and the age at last-birth could be around 28 years (38 now). Women could then be expected to enter the labour force in large numbers. Consequently, the growth rate of the labour force would remain higher than the growth rate of total population for an extended period. The significance of this deferred bonus could be higher than the immediate bonus resulting from age structure changes. But this dividend would be intertwined with structural changes in the economy like agricultural diversification and rural-urban migration.
The future is not inevitable. And dividends will only be garnered by the brave who have a strategic vision of human development in operation. In a country where artistic portrayal of the female form leads to violence, we should be careful about projecting high dividends without any change in mindset
Attitudinal change is important. This is not easy in a paternalistic society, as the Karnataka case showed. In a country where artistic portrayal of the female form leads to violence, we should be careful about projecting high dividends without any change in mindset. Economic and social change are not for the fainthearted. The good things of life will take effort todayfor us to envisage a brighter tomorrow.
The author is a former union minister for power, planning and science, and was vice-chancellor of JNU. Write to email@example.com