The women who went missing in our demographic dividend

Photo: SolStock
Photo: SolStock


Indian women are getting better educated and having fewer babies but not taking enough paid jobs

In the small talk that well-to-do middle-aged Indian men tend to make in their drawing rooms over a cup of tea, they often blame our huge population as the root cause of all our problems, social, economic and political. Their solution is population control. In their heads, it’s a case-closing argument. The mother of all solutions. The trouble is, like most lazy arguments, it’s wrong.

The recently released National Family Health Survey (NFHS-5) of 2019-2021 shows why. As per the survey, India’s total fertility rate now stands at 2. It was 3.2 at the turn of the century and 2.2 in 2015-2016, when the last such survey was done. This means that, on average, 100 women had 320 children during their child-bearing years (aged 15-49). It fell to 220 and now stands at 200.

Hence, India’s fertility rate is already lower than the replacement level of 2.1. If, on average, 100 women have 210 children during their childbearing years and this continues over the decades, the population of a country eventually stabilizes. The additional fraction of 0.1 essentially accounts for females who die before reaching child-bearing age.

The interesting thing is that in urban India, the total fertility rate is 1.6, significantly lower than the replacement rate. In rural India, it’s at 2.1, just equal to the replacement level. As far as state-wise comparisons are concerned, Bihar with a total fertility rate of 3 is at the bottom and Sikkim with a rate of 1.1 is at the top.

As the NFHS-5 points out: “The number of children per woman declines with women’s level of schooling. Women with no schooling have an average of 2.8 children, compared with 1.8 children for women with 12 or more years of schooling." As per the survey data, only 55% women in Bihar in the 15-49 age group are literate.

So, what does this mean? Will the Indian population start stabilizing immediately? The answer is no. This is primarily because the number of women who will keep entering child-bearing age will grow for a while, simply because of higher fertility rates in the past. Also, with access to better medical facilities, people will live longer. Hence, India’s population will start stabilizing in around three decades.

Nonetheless, population growth will keep slowing down. In fact, as the NFHS-5 points out: “Nearly one in four (23%) currently married women aged 15-49 want to have another child… Similar to women, a little over one in four (26%) currently married men aged 15-49 want to have another child." What this tells us is that almost three-fourths of married couples in the age group of 15-49 just want to have one child. This indicates that the total fertility rate will fall further in the years to come.

A falling fertility rate has an economic payoff. As Amlan Roy writes in Demographics Unravelled: How Demographics Affect and Influence Every Aspect of Economics, Finance and Policy: “Smaller numbers of children per household lead to more significant investments per child, more freedom for women to enter the formal workforce and more household savings for old age. The national economic payoff is a demographic dividend [emphasis in the original]."

The point that Roy is making is that as the family size comes down, more women take on paid jobs. This increased income and then spending adds to economic growth. There is another factor at work here. As Roy writes, “The labour force temporarily grows more rapidly than the dependent population, freeing up resources for investment in economic development and family welfare."

In the Indian case, the fertility rate has been falling over the years and at the same time the working-age population has been growing at a faster rate than the overall population, but has that led to more women taking on paid jobs?

As per NFHS-5, one in four women in the age-group 15-49 are employed. When it comes to men, nearly three in four men are employed. This is more or less similar to the NFHS-4 findings of 2015-16. Also, rather disturbingly, the more educated a woman is, the lower are her chances of being employed. Around a third of women with less than five years of education are employed. This drops to 18.4% for women with an education of 10-11 years and then jumps a little to 21.5% for women with 12 or more years of education.

Clearly, there is enough evidence to suggest that India’s demographic dividend is not playing out like it was expected to. While women are getting more educated and having fewer babies, they are not taking up paid jobs.

At the same time, the difference between working-age population growth and overall population growth, after peaking in the late 1990s to mid 2010s, has been coming down over the years. This difference is expected to last for another two decades.

To conclude, it is worth remembering what Roy writes: “Reducing high fertility can create opportunities for economic growth if the right kinds of educational, health, and labour-market policies are in place." And we have very little time left to exploit the age profile of our population to our advantage. Of course, this wouldn’t stop men from making small talk about population control in their drawing rooms. How boring would the world be without a chance to discuss simplistic solutions over a cup of tea and some biscuits on a warm summer afternoon?

Vivek Kaul is the author of ‘Bad Money’.

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