The Demographic Dividend; Evidence from the Indian States
Large cohorts of young adults are poised to add to the working-age population of developing economies. Despite much interest in the consequent growth dividend, the size and circumstances of the potential gains remain under-explored. This study makes progress by focusing on India, which will be the largest individual contributor to the global demographic transition ahead. It exploits the variation in the age structure of the population across Indian states to identify the demographic dividend. The main finding is that there is a large and significant growth impact of both the level and growth rate of the working age ratio. This result is robust to a variety of empirical strategies, including a correction for inter-state migration. The results imply that a substantial fraction of the growth acceleration that India has experienced since the 1980s - sometimes ascribed exclusively to economic reforms - is attributable to changes in the countryâ€™s age structure. Moreover, the demographic dividend could add about 2 percentage points per annum to Indiaâ€™s per capita GDP growth over the next two decades. With the future expansion of the working age ratio concentrated in some of Indiaâ€™s poorest states, income convergence may well speed up, a theme likely to recur on the global stage.
|Date of creation:||01 Feb 2011|
|Date of revision:|
|Contact details of provider:|| Postal: International Monetary Fund, Washington, DC USA|
Phone: (202) 623-7000
Fax: (202) 623-4661
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC
|Order Information:||Web: http://www.imf.org/external/pubs/pubs/ord_info.htm|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bloom, David E. & Canning, David & Fink, Gunther & Finlay, Jocelyn E., 2007.
"Does age structure forecast economic growth?,"
International Journal of Forecasting,
Elsevier, vol. 23(4), pages 569-585.
- repec:gdm:wpaper:4108 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:11/38. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow)or (Hassan Zaidi)
If references are entirely missing, you can add them using this form.