ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Declining Fertility and Demographic Dividend

A concerted policy to harness the demographic dividend is the need of the hour.


Demographic transition has two components, that of fertility and mortality transition. However, it is fertility transition that plays a decisive role in determining the demographic dividend of any population. The steady decline in the total fertility rate (TFR), an indicator of the average number of children expected to be born to a woman during her reproductive span, has been the main driver of the slowing down of population growth in India in the recent decades. Consequently, this has several implications for policy, as population growth is set for a slowdown in the coming decades, along with an increase in the share of the working age population. While the high fertility states have also recorded a sharp decline in the TFR over time, it has declined to 2.2 per woman in the 22 major states in 2017. However, due to the skewed sex ratio, the required replacement-level fertility, or the effective replacement-level fertility is higher than the benchmark of 2.1. Furthermore, there is considerable heterogeneity across states as well as rural and urban areas with regard to fertility, mortality, and age structure. The factors that contributed to a fall in the TFR include increasing mobility, delayed marriage, access to higher education, and greater financial independence of women.

The data from the Sample Registration System (SRS) 2017 reveal that several contrasting phenomena are in operation in the rural and urban areas with regard to the decline in fertility rates. Even though fertility rates fell across all age groups, fertility in the older age groups has risen over time in urban India. While in the rural areas the fertility rates in the higher age groups, that is, among mothers aged above 35 has fallen, fertility of older women has grown in urban areas. However, the overall trend is that of falling female fertility rates. It was found that education too had a role to play with regard to fertility rates among women. Although in general, fertility is lower among educated women, in urban areas, fertility rates among women in their 30s are higher among the better educated than the less educated women. This is because better educated women have been able to delay marriage and childbirth, while access to better healthcare facilities enables women to have children at a later age. However, in the urban areas fertility has been falling faster than expected. As of 2017, the TFR of urban India has fallen to 1.7, which is lower than the replacement level. The fertility rates of urban areas of all states, except for Bihar, Rajasthan and Uttar Pradesh, are either at the replacement level or below it. Also, for 10 states, the TFR is below 2 in rural areas.

The population parameters also indicate that the demographic transition in India has not been uniform. Although the population growth is set for a slowdown, an increase in the share of the working age population points to the advantage of the demographic dividend in India. This means that the growth rate of the working population is higher than the general population. Normally, the demographic dividend can last for 40 to 50 years and countries can benefit only if they can use it effectively. Otherwise, the demographic dividend can also turn into a demographic burden. In India, as there is a clear divergence in demographic patterns across regions and states, the demographic dividend window is available at different times as the age structures differ across the states. According to the United Nations Population Fund, in the southern and western parts, the demographic dividend is set to close in five years with an ageing population, whereas in some states it would remain open for 10 to 15 years. In the high fertility states of the north, the window is yet to open. Thus, India has the advantage of a longer span of the demographic dividend due to the differences in the patterns in demographic transition across states.

An improvement in the dependency ratio due to the demographic dividend leads to the hypothesis that the increase in the working age population would lead to acceleration in growth. But, is there a concerted effort to build human capital to take advantage of the demographic dividend on the part of policymakers? The benefits of the demographic dividend can be reaped only if sufficient investments are made for basic infrastructure, health, educational attainment, and skill upgradation of the workforce, apart from the creation of sufficient numbers of suitable jobs to provide employment to the burgeoning workforce. This is because the available workers would not be absorbed spontaneously to deliver high growth. To harness the demographic dividend, therefore, it is necessary that people in the working age are gainfully employed and that those working have proper education and skills so that they are productive in the workplace. On the contrary, with unemployment rate at a 45-year high of 6.1%, it is clear that enough jobs are not available and the poor employability of the workforce points to the deficiencies in their health, educational attainments and vocational training, thereby validating that enough is not being done to take advantage of the demographic dividend.

Updated On : 13th Aug, 2019


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