Girls must attend school for our per capita income to rise faster

While the difference at an aggregate India level was 110 basis points, the difference at state levels varied quite a bit. Let’s take the case of Tamil Nadu. The state’s GDP in 2021-22 rose by 8%, whereas the per-capita income rose by a lower 7.6%. The difference in this case was around 40 basis points. In the case of Bihar, the state’s GDP in 2021-22 rose by 11%, whereas the per-capita income rose by 9.4%. The difference in this case is 160 basis points. The per capita income of Tamil Nadu stood at ₹1.54 lakh, whereas that of Bihar was ₹30,779 (in real terms adjusted for inflation).

So, what is happening here? Nilakantan R.S. has an explanation in South vs North: India’s Great Divide. Basically, states like Bihar pay a tax for higher population growth, which is not the case with Tamil Nadu.

As he writes: “All southern states, by virtue of having had below-replacement fertility rates for over a generation, realize their economic growth almost entirely because their populations have stabilized." What does this mean in simple English? The fertility rate of a state is defined as the number of children born to a woman on average. As per the National Family and Health Survey 5 (NFHS-5), 2019-2021, the total fertility rate in Tamil Nadu was 1.76. This basically means that 100 women on average have 176 children during their child-bearing years.

Tamil Nadu has had a low-fertility rate among women for a while now. In fact, the rate has been below the replacement level of 2.1. When 100 women on average have 210 children during their child bearing years, the population tends to stabilize in the coming decades. When the fertility rate is lower than the replacement level, then the population growth first slows down and then starts to contract, assuming that the fertility rate continues to remain lower than the replacement level. This has been happening in Tamil Nadu and other southern states, with their population growth having slowed down over the years.

In the case of Bihar, the fertility rate as per NFHS-5 stood at 2.98. While the fertility rate in Bihar has fallen over the years, it is still very high. This leads to faster population growth and hence the average income of a Bihari does not grow as fast as that of the overall state.

What’s true of Bihar is also true for Uttar Pradesh (UP), where the state’s GDP grew by 4.2% during 2021-22 whereas the per-capita income grew by a much lower 2.7%. The state has a fertility rate of 2.35, which is not as high as that of Bihar. Nonetheless, the state is paying for having had a very high fertility rate of 3.82 as late as 2005-06, the year when the NFHS-3 was carried out. The high fertility rate of the past has ensured that the population in the state continues to grow at a faster pace than in India’s southern states.

So, how can states bring down their fertility rates? There is a very strong link between the under-5 mortality rate and the fertility rate. The under-5 mortality rate is defined as the probability of a child dying between birth and the child’s fifth birthday. As per the NFHS-5, the deaths per live births for a period of five years before the survey was the highest in UP, at 60 children per 1,000 live births. Bihar was next at 56. When it comes to large-populated states, Kerala and Tamil Nadu had the lowest under-5 mortality rates of 5.2 and 22, respectively. When more children survive, families tend to have fewer children.

Also, educating girls plays a very important part here. As Charlie Robertson writes in The Time-Travelling Economist: Why Education, Electricity and Fertility are Key to Escaping Poverty: “Girls who remain at school until their late teens don’t start as early, so tend to have at least one less child in their lifetime." The fertility rate among women with no schooling stood at 2.82, whereas when it comes to women with 12 or more years of schooling, the fertility rate was at 1.78.

At an individual state level, around 29% of women in Bihar spend 10 or more years in school. The figure for UP is around 40%. For Kerala and Tamil Nadu, the figures are 77% and 57%, respectively. Hence, as Nilakantan writes: “Keeping girls in school, however, is the greatest force multiplier for improving development outcomes. Education among girls is the most significant variable correlated with low fertility rates worldwide."

In fact, he goes on to suggest that the well-run midday meals for children in southern-India helped bridge the gap between the gross enrolment ratio for girls and boys. Nonetheless, what is worrying is that “dropout rates for girls are higher than for boys at all levels all across India, except in Kerala."

To conclude, keeping girls in school is a very important factor in driving social betterment as well as economic growth, something that states like Bihar still need to catch up on.