Richika Rana
The phenomenon of demographic dividend signals transition of a country characterized by minimal use of technology, low level of education, and low economic growth having high birth and death rates to an industrialized nation with advanced technology, higher literacy level, and income growth having low birth rates and low death rates. The existing scientific literature confirms that now developed nations were able to successfully exploit their demographic dividend and translate it into sustained economic growth and improved standard of living. The birth rates and death rates are affiliated to and correlate with accompanying stages of manufacturing growth. The objective of this study is to review the experience of three countries in exploiting their demographic dividend and map out the lessons that India can implement to benefit from this window of opportunity. The countries selected for examination are the Republic of Korea, Brazil, and China. The nations selected had varied success in unlocking the demographic dividend. South Korea along with other Asian tiger economies has successfully utilized both first and second demographic dividend. With sustained investment in health and education along with increasing women's participation in the labor force and utilizing increased saving rates for capital accumulation, it was successful in leveraging its demographic dividend for economic development. China too greatly benefitted from its first demographic dividend becoming the 'factory of the world'. Comprehensive planning and its effective implementation along with an export-oriented growth strategy led to accelerated economic growth. With an aging population and the demographic effects of the one-child policy, China's ability to capitalize on the second demographic dividend in the future is not certain. Brazil on the other has failed to take advantage of its favorable demographic transition. With misplaced priorities and the absence of determined policy action to manage its demographic transition, Brazil has left itself vulnerable to demographic 'disaster' instead. The paper concludes that demographic dividend is not a guaranteed event for a country. To successfully benefit from demographic dividend a country needs conducive policy planning and investment in the development and utilization of the country's human capital. India also needs to correct the problem of 'missing women' in its labor force. It needs to empower local public administration to ensure efficient public services and fostering local opportunities. Also, India should have the foresight to formulate a comprehensive economic and social strategy to ensure a smooth demographic transition from a young country to a middle-aged one. A country's success with demographic dividend ultimately needs integrated demographic, political, economic and, social policies altered a country's requirements.
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