Source: India’s fall in fertility rate may be a boon in disguise. Here’s why (The Indian Express, April 4, 2024)
India’s fertility rate is declining faster than expected, presenting both challenges and opportunities. While a smaller population peak can lead to economic growth, it necessitates investments in education, skills development, and increased female workforce participation. This demographic shift requires India to prepare its workforce for the future.
India’s Population Projection: A Closer Look
- UN Population Division Projection: The UN predicts India’s population will reach nearly 1.7 billion by 2065, before it starts decreasing. This prediction has dominated discussions, overshadowing other factors like age distribution, population quality, and its impact on economic growth.
- Insights from The Lancet: A report from The Lancet suggests India’s Total Fertility Rate (TFR) could drop to 1.29 by 2051. This estimate, based on complex demographic modeling for 204 countries, offers valuable insights into India’s population dynamics. While the estimate ranges from 0.97 to 1.61, its scientific methodology provides interesting pointers for India’s future population trends.
- Different Projections, Different Trends: The government’s technical group projects a TFR of 1.94 for 2021-2025, declining to 1.73 for 2031-2035. However, The Lancet’s study suggests lower rates. Even the NFHS 5 data estimates are lower. These variations suggest that India’s population might stabilize below 1.7 billion sooner than expected, possibly before 2065.
India’s Demographic Transition
- Economic Development: India’s rapid economic growth, especially since the early 2000s, has been a major driver of demographic changes in the country.
- Decline in Mortality Rates: Lower rates of infant and child mortality mean families no longer need to have many children for support in old age. This reduction in mortality rates is a significant factor influencing demographic shifts.
- Women’s Education and Work Participation: Increasing rates of women’s education and participation in the workforce also contribute to the demographic transition in India. As women gain more education and employment opportunities, they tend to have fewer children.
- Improved Living Conditions and Social Security: Better housing conditions and the presence of a more robust old-age security system further support the demographic transition by providing families with alternative forms of support beyond having many children.
Impact of Declining Total Fertility Rate (TFR)
Shift in Dependency Ratio
As TFR declines rapidly, there’s a decrease in the dependency ratio, meaning a larger proportion of working-age adults compared to dependents. Initially, this surplus income can boost economic growth and facilitate positive intergenerational transfers. However, it also leads to a larger elderly dependent population, as observed in countries like China, Japan, and various European nations.
Regional Variations
The decline in TFR varies across Indian states, with some lagging behind others. It’s estimated to take about a decade for states like Uttar Pradesh, Bihar, and Jharkhand to reach replacement-level fertility. Even within states, there are significant inter-district differences. While some districts in Odisha are rapidly transitioning, others still have TFR levels above replacement.
Positive Economic Impacts
Despite challenges, the demographic transition is expected to positively impact several states by increasing labor productivity through various channels. This includes an increase in capital resources per capita, reallocating resources from population growth to education and skill development, and shifting the age distribution towards a larger fraction of the working-age population.
Also Read | Shifting Demographics: North vs South India’s Population Dynamics
Educational Sector Changes
- School Enrollment: With declining TFR, there will be fewer children enrolling in schools, similar to trends seen in Kerala. This could potentially improve educational outcomes without requiring additional resources. However, attention is needed on reducing dropout rates, especially in middle and higher education.
- Women Workforce Participation: As childcare demands decrease due to declining fertility rates, more women are expected to join the workforce. Southern states, with a larger share of women in employment programs like MNREGA, serve as indicators of this trend.
Also Read | Labour Force Participation Of Married Women
Sectoral and Spatial Shifts in Labor Market
- Sectoral Distribution: A shift of the workforce from agriculture to industries and services is expected, balancing the sectoral distribution. Skill development among marginalized groups can ensure a sufficient labor supply for growing sectors.
- Spatial Balance: The movement of labor from northern to southern states is increasing, driven by opportunities in modern sectors. Over time, this trend should lead to improved working conditions, reduced wage discrimination for migrant workers, and enhanced security measures in receiving states.