A Review of Age Structural Transition and Demographic Dividend in South Asia: Opportunities and Challenges

Abstract

South Asia is experiencing rapid demographic changes that accompany age structural transitions creating a window of opportunity for potential demographic dividend. Studies on age-structural changes and their implications for socioeconomic development are rather limited for South Asia. In this paper we critically review, analyse and synthesize the unfolding age structural transition and its potential for demographic dividend in South Asia. After a brief description of demographic transition in the countries of South Asia, we estimate the first demographic dividend using the accounting framework. This is followed by a discussion of the socioeconomic development opportunities and challenges arising from age structural transition in South Asian countries. We focus on the five major South Asian countries, namely Bangladesh, India, Nepal, Pakistan and Sri Lanka. Among the South Asian countries, India has an added advantage arising from its regional differentials in the timing and pace of age structural transitions which other comparable countries have not had. With rapid reduction in fertility, Bangladesh has had greater potential to benefit from first demographic dividend. Nepal and Pakistan have just began to reap the benefits from the window of opportunity. Sri Lanka is already past the period that was available for first dividend, but opportunities are becoming available to benefit from the second demographic dividend. With the right institutional contexts, social and public policies, there is most likelihood for South Asia to experience high economic growth and increased standard of living.