Capitalizing the Demographic dividend of Pakistan-future prospects

Abstract

Demographic dividend refers to the economic growth and development resulting from a change in the age structure of a country’s population.1 Rapid growth in a country occurs as a consequence of declining fertility, facilitated by low child and infant mortality. A country with younger people and lessoning fertility reaps a ‘demographic dividend’ by increasing productivity and decreasing dependency. With low dependency ratio, governments and people can redirect resources for investments in education, healthcare, and infrastructure, creating a virtuous cycle of development, as better education and healthcare can now lead to greater productivity gains.2 The demographic dividend is specifically beneficial for those countries which accelerate their economic development through strategic investments and policies.3 The relationship of economic development and population changes has evolved into an important subject recently. Historically since the Second World War, a demographic shift has been undergoing in developing countries, from high to low rates of mortality and fertility. This transition produced a "boom" generation, that is, a generation larger than those immediately before and after it.4 The East Asian nations were at the forefront of this transition while Latin America, began their transitions afterwards, in the 1960s and 70s. Countries in the Middle East and Africa, have not yet fully begun, or are in the initial stages of this transition.5 Pakistan, like many other countries, stands at a critical juncture where the demographic dividend can either be a transformative force for economic growth or a missed opportunity. Currently, 64 percent of the nation is younger than 30 years of age. Pakistan now has more young people than it has ever had in the past, and predicted to continue to increase till 2050 with many needing jobs. The age distribution of Pakistan's population is heavily skewed towards youth. This presents both opportunities and challenges for the country's future development.6 A favorable age structure alone does not yield the dividend. It does not produce benefit automatically. Just like any opportunity, one must exert effort to realize its advantage. To materialize the dividend, the sizeable young and working-age population must be gainfully employed7. For economic growth, quality education, adequate nutrition and health, and access to sexual and reproductive health must be ensured to younger population. The country faces multifaceted challenges that intersect with the broader themes of the demographic dividend. One of the biggest challenges that Pakistan faces in realizing its demographic dividend is the lack of education.8 According to a recent report, only 58% of Pakistani children go to primary school, and just 28% complete secondary education. This lack of education limits the potential of the workforce and hinders economic growth.