Youth As Demographic Dividend or Challenge

This article is derived from my presentation in Youth Studies conducted by YUWA.

Youth as a Demographic Dividend or Challenge

Half of the population in the world are below 30 among whom more than 80% of the young population reside in the developing economies of the world. With a large number of population entering into the workforce, it is the young people who will decide the future of the developing economies around the world.

What is Youth Bulge and How does it occur?

The large proportion of young people in a country is termed as youth bulge. It is said to occur from two factors:

Decline in the Fertility Rate

When the fertility rate starts to decline from the high fertility ratio to low, then the number of newborn babies start to decline which will lead to an increasing proportion of the youth in the society.

Active population greater than the inactive population

When the fertility rate declines, the proportion of the active population becomes greater in the society. According to demography, the population in between the age group of 15 to 65 is termed to be the active population.

Comparisons of three countries, Germany, Nepal and Uganda

Figure1: Fertility Rate and Population Growth Rate

While comparing the fertility rate of two countries, Uganda has a very high fertility rate. From 7 children per woman in 1960, the fertility rate has only declined by one children in 2012 and is at 6 children per woman. Nepal has seen a significant decline in the fertility rate from 6 children in 1960 to only 2.3 children in 2012. Germany has a sustained low level of fertility rate. In 1970 alone, Germany had low level of fertility rate which was even lower than the replacement fertility rate. Replacement fertility rate is considered to be 2.1. Now the fertility rate is almost at one child per woman. This fertility rate has been shown in the population growth rate. As predicted, Uganda has the highest population growth rate as compared to Nepal and Germany. Germany unlike these two young countries, Germany has witnessed the decline in the population growth rate towards negative.

Figure 2: Age Dependency Ratio

While analyzing the three graphs relating to the age dependency ration of three countries, we can analyse that Uganda has a high dependency ratio and the composition of the dependent population consists of a very large percentage of young population below the age of 15. Germany has the lowest dependency ration. However, the young people under the age of 15 shows a very low proportion which indicates that the young population is declining in Germany. To its contrast, however the proportion of old population is significantly higher compared to Nepal and Uganda. Nepal is the country which is in between Uganda and Germany. There is a large number of active population as compared to the inactive population in the country. The dependency ration is in a declining trend. The dependency of young population below 15 is also declining. Thus, Nepal seems to be experiencing the youth bulge at the moment where the population above 15 is in an increasing ratio with declining fertility.

Demographic Dividend

When youth bulge occurs in the country due to the change in the age structure of the population, an accelerated economic growth can be achieved through the strategic investment in the growing youth population of a country. This share of dividend or profit from the growing youth population is termed as demographic dividend. There are two particular characteristics of demographic dividend. They are as follows:

Demographic Dividend is Time Bound: Demographic Dividend occurs for 40 t0 60 years in a country and is not an evergreen phenomenon.

Demographic Dividend is not an automatic process: The dividend occurs only when there is strategic investment upon the young people. Without the special investments on them, we cannot expect the dividend.

Examples of Demographic Dividend:

The East Asian economies had achieved the double digit during the 1990s. The countries had experienced the economic boom since the mid of 80s till the initiation of currency crisis in the mid of 90s. While analyzing the population pyramid of these countries, it is found that the country at the time were youthful countries and were facing an increasing youth bulge.

 

South Korea, 1990                                            Thailand, 1990

 

The population pyramid clearly indicates the growing youth population in both the countries thus experiencing the youth bulge. These countries had been able to capitalize its large growing youth population who thus resulted to an accelerated growth rate in the country. Now the countries fall in the countries of transition.

Research on seven Carribean CountriesResearch on seven Caribbean countries have shown that lowering youth unemployment could raise GDP by anywhere from 0.3 to 2.7%. Overall statistics have determined the global average rate of return to one extra year of schooling to be 10%. This is different for girls. The return has been seen up to 20% among girls. Enhancing young people’s capacities can yield larger returns during the course of their economically active lives.

Demographic Challenge

When the youth population is invested upon, it will yield demographic dividend but if the same population is ignored and not invested upon leading to the mass unemployment and underemployment, there are larger chances of political violence and social conflict. It occurs especially when the economy is weak and the governance is poor. With an increasing labor force in the country, the poor performance of the economy cannot get along with the labor force to create the employment opportunities for the growing youth force. This will lead to the mass unemployment. When the governance is poor and the young people are not included in the decision making process, then it will lead to the political exclusion of the young people.

Examples of youth bulge:

According to US council on Foreign Relations, “Between 1970 and 1999, 80% of civil conflicts occurred in countries where 60% of the population or more were under the age of thirty… Today there are sixty-seven counties with youth bulges, of which sixty of them are experiencing social unrest and violence.” While unfolding the history, before the French Revolution i.e. in eighteenth-century France, a spike in population boosted demand for food, which in turn drove up inflation, reduced the purchasing power of most citizens, and sparked social unrest. 

According to Population Action International (PAI), the likelihood of experiencing conflict is highest among the countries with “very young” age structures, where upto 77% of population is younger than age 30. Between 2000 and 2007, two thirds of all new major outbreaks occurred in very young and youthful countries. PAI further states that, between 1970-2007, 13% of very young countries were rated as full democratic compared to 81% of mature countries.

Consequences:

When the social unrest and political violence occurs, the government has to spend more on the curative measures which leads the diversion of the resources. Much resources are wasted in the unnecessary expenditures like buying weapons and expanding army when it could have been used in many other essential sectors like education and health. The estimated cost of Srilanka’s civil war between 1984 to 1996 have been estimated between $1.6 to $ 2.8 billion, or between 13 and 23% of GDP

Nepal

Nepal with a median age of 21.5, falls under the category of youthful country. Nepal is right now experiencing the youth bulge which probably will last till 2040. According to the report by ILO on the “Labor market transition of Young Men and Women in Nepal”, the group of young people aged 15–29 in Nepal represents more than one-quarter (28 per cent) of the total population and, of these, over 40 per cent are teenagers aged 15–19, the youngest part of the age group.

The unemployment rate for those aged 15–29 is 19.2 per cent, while the national unemployment rate for people older than 15 is just 2.7 per cent. Close to 27 per cent of all unemployed youth have been looking for work for more than 1 year.

Nepal, 1990                                                           Nepal, 2010

                        

                    Nepal, 2030                                                            Nepal, 2040

While analyzing the population pyramid of Nepal, during the 1990s, more than 60% of the population was under the age of 30. With the decrease in fertility, in recent years the age group of 0-4 has been going down thus creating a further increase in the youth population. However, there has not been much improvement in the young people’s lives due to the inefficient economy and the poor governance. This was also one of the reasons for the twelve years of civil war in the country. Government now has formulated the youth policy and has been trying to implement it. Though this is a positive change, a lot needs to be done to address the youth issues.