Population Dynamics in India and Implications for Economic Growth

Abstract This article looks at the consequences of India's demographic transition—higher population growth and transforming age structure—and its impact on growth. In a comparison group comprising select East Asian economies, approximately 2% of their growth in income per capita (over 1975–2005)—roughly one-third of the supposed miracle—can be attributed to demographic change. Counterfactual experiments based on low and medium fertility rates for India imply a sizeable demographic dividend—roughly to the order of an additional percentage point or more annually to per capita income growth (projecting forward to 2050). The key policy question is whether health and education allocations (at all levels) by the government will grow in tandem to transform India's youth advantage into productive employment.