Demographic Dividend Challenges and Benefits

Demography
Demography is the study of human
population.
It focuses on:

Study of the size,

structure and
Distribution of population.

Using Demographics population in any

space and time can be estimated.

Demography

The data collection in demographics is executed by

two methods:

Direct: Direct Data comes from statistics

registries (Censuses and registration system).

Indirect: Indirectly data is extracted using

different demographic methods/models.
Some important demographics process are:
Fertility(birth
rate),
Mortality(death
rate),
Migration and Mobility.
Some important ratios are Fertility ratio, Mortality
ratio, Sex ratio and Life expectancy ratio.

Demography in Business
environment

Based on age, gender, ethnicity, income group

and several other parameters, helps business to
segment the market and identify the target
group that are most likely to become their
customers.

Such grouping of people based on parameters

is known as demographic environment analysis.

A marketer is, however, required to keep in

mind
also thedynamic attributes of such
environmentsand keep updating the data that
is collected on a continuous basis.

Working
Population
--------Dependen
t
population

Demographic
Dividend

Demographic Dividend is a benefit reaped by a

country when its working population outweighs its
dependent population.

The Demographic shift/transition usually initiates

the dividend. The shift from rural agrarian society
with high fertility and mortality rates to a
predominantly urban industrial society with low
fertility and mortality rates.

The period of demographic dividend (as per

statistics) lasts for about 20-30 years (sometimes
even more).

Demographic dividend of
India

2011 census data has revealed shows that Indias

working population (roughly 15-64 years) is now 63.4%
of the total population, as against 60% in 2001.
Also the dependency rate has reduced from 61% to
55%.
India is all set to become the youngest country by 2020
(with an average age of 29 years) compared to China
and US (the average age is expected to be 37 years).
It is also estimated to account for around 28% of the
worlds workforce.
IMF, in 2011, reported that India's demographic
dividend has the potential to add 2 percentage points
per annum to India's per capita GDP growth over the
next two decades.

Major benefits of Demographic

dividend in India
During the course of the demographic dividend
there are major four ways through which the
benefits are often delivered:

Increased labor supply : The working

population in China during the 1960s due
to demographic dividends rose sharply.
Only during that period China rose to the
top of the manufacturing in many sectors.
Similarly
the
delayed
demographic
dividend in India is expected to boost the
labor force.

Major benefits of Demographic

dividend in India

Increase in savings : Indians are hell bent on

savings so demographic dividends naturally
reflect on our savings as government policies
are favoring low interest rates. (insurance,
fixed deposits, etc).

Increase in domestic demand: Earlier

Demographic dividends in the 1960s Asia
had facilitated GDP of those Nations. India
will hope for a similar bonus.

Increase in human capital: Since 2011,

around 300 million youngsters above the age
of 15 (above all females) are studying in
schools and colleges. So they will be far
better skilled than earlier expected.

Challenges faced by India on

Demographic Dividend

Demographic Dividend is a limited time window and needs to

capitalized.

Many policies related to employment, education standards,

health management, skill improvement, quality of work and
living, security need to be drawn.
Employment : India needs to create 1 million jobs every month
to be able to provide employment for the population entering
working age group and for those moving out of agriculture.
Quality of work: About 92% of India's are informal workers.
Informal employment is insecure, poorly paid and has no
social security. There's also a difference between wages of
regular workers and informal or contract workers.

Challenges faced by India on

Demographic Dividend
Education :
India's literacy rate, according to Census 2011, is
around 74 per cent. There are huge concerns with
respect to quality of primary education in schools.
The situation in higher education is even more
problematic for India's participation in the global
knowledge economy.
The quality of vocational training is weak too.
Further, Only 16 per cent of Indian firms carry out
any in-firm training themselves, as against 80 per
cent of Chinese firms.

Challenges faced by India on

Demographic Dividend
Social demographics:
The workers participation should have increased as per
the 2011 census, but it hasnt. The working population
is stuck in the same level as 2011. This is because
greater number of people are opting out of work.
The sharpest withdrawal has been in 15-25 age group.
This is attributed to the female population. The main
reason is Social.
As families move from lower middle class to upper
middle class, they get social status by stating that their
women do not go out to work. Thus the rise in middle
class has exacerbated female withdrawal.