The youth factor

Demographic transition in Pakistan has been quite sluggish over the past couple of decades. Its population growth rate has been stagnant at around 2.0 per cent for the last six years at least.

Experts however keep their hopes alive amid these worrying statistics by hoping that the country can reap some economic benefits from the demographic dividend.

The demographic dividend is the window of opportunity provided by changes in age structure, which, if seized at the right time, allows countries to reap economic benefits, provided that they maintain a sustained decline in fertility.

These changes in age structure are such that they appear in the form of a ‘youth bulge’ – an increase in the size of people who fall in the 15–29 years age group which is also the primary element of the workforce of any country. An excess of people aged 15–29 years indicates an increase in labour and economic activity.

However, what is important to consider here is the timely action of seizing this opportunity, because if wasted this can have far-reaching implications in terms of managing the growing number of people.

We are a country of 240.5 million with a continuously increasing population. According to the World Population Datasheet 2023 of the Population Reference Bureau, the country is growing at a 2.0 per cent rate of natural increase, which is the difference between births and deaths; it is 1.2 per cent for the entire region of South Asia.

This suggests that the population age structure for Pakistan is such that it results in a broad-based pyramid, reflecting the continuous increase in the number of births taking place.

It is important to look at our population’s age structures to understand the challenge we face today in terms of reaping the demographic dividend. The PRB estimates show that 38 per cent of the population in Pakistan falls in the younger than 15 category while 4.0 percent falls in the 65 plus age group, thus making 42 per cent of the population as dependents. This leaves around 58 per cent in the working age group classified as the ages between 15 and 64 years, thereby resulting in a youth bulge.

Actualizing this youth bulge is thereby the key to reaping the demographic dividend as Dr Dure Nayyab pointed out in her seminal work in 2008: “An increasing proportion of working-age individuals in a population enhances overall productivity, with improved skill levels of workers contributing to it.”

However, this youth bulge must be accompanied by an overall decline in fertility, leading to a shrinking base of the population, which unfortunately Pakistan is nowhere even close to achieving as the country’s fertility rate still hovers around 3.0 per cent. This makes it difficult for the youth potential to be actualized as there are not enough savings to invest in the education and skills of the growing supply of labour.

This is reflected in an overall high rate of unemployment in the country which stood at 6.3 per cent in 2020–21, and an exceptionally high rate of unemployment among women at 8.9 per cent, according to the Labour Force Survey 2020–21.

Countries like Korea and Thailand managed to reap the benefits from the demographic dividend by efficiently working through three mechanisms: increased labour supply; enhanced savings; and greater human capital – educated and skilled labour force.

Thailand kick-started its demographic and economic success story by rapidly pushing for an increase in the uptake of contraceptives, thereby slowing down the pressure of a broad-based population structure which allowed it to divert its resources towards achieving an educated and skilled labour force.

Pakistan’s population age structure is such that it is essentially a country of young population with an estimated 159.83 million people falling in the working age category as per the estimates of the latest Labour Force Survey 2020–21. This makes up for the presence of a youth bulge which indicates towards an increased supply of labour.

Now one may ask why the youth bulge factor did not work in the case of Pakistan. First, we have had a sustained high level of fertility, or in other words, there is a continuous overall rapid growth in population taking place. In addition, the labour force participation rates for both men and women aged 15–29 are low, resulting in a high rate of youth unemployment. According to the Pakistan National Human Development Report 2020, the youth unemployment rate for Pakistan is around 11.6 per cent for those in the 20–24 years age group.

These figures make up a sorry image of the country’s youth profile, crushing the hopes associated with the youth bulge and the demographic dividend dream. Pakistan has unfortunately failed at utilizing the potential of its youth, which makes up about 60 per cent of the country’s population.

What is perhaps more worrisome here is to understand that when such a large proportion of our population remains unskilled and unemployed, they are potentially at a greater risk of falling into depression and/or indulging in crimes or illegal practices. Thus, it should come as no surprise why large numbers of people attempt at crossing the borders irregularly even at the cost of their lives.

The demographic dividend is highly time specific, and it is the interplay of factors such as declining fertility, increased savings, education and labour force participation (especially women’s) which make it a reality.

The youth bulge factor alone, on the contrary, is a recipe for disaster as uneducated, unskilled and idle people are more of a demographic threat to the country than a window of opportunity for economic gains.

Although more than a decade has been wasted to seize this opportunity as the demographic dividend seems to have gone with the wind, maybe we can try lowering the potential threat that this window still poses by investing in our young generation. This can help control the damage associated with the demographic threat we face today.

The writer is an associate researcher at the Lahore School of Economics. She can be reached at: qazimemona94@gmail.com