- Definition: Demographic dividend is an episode of higher economic growth.
- It is driven by changes in the age structure of the population.
- It is the additional growth due to demographic factors alone.
- The specific variable is the ratio of working age (WA) population (20-59) to non-working age (NWA) population.
- Benefits for India:
- India’s demographic cycle is 10-30 years behind other countries (China, Korea).
- Next few decades present an opportunity for India to catch up in per capita income.
- Both level and growth of WA/NWA ratio positively impact economic activity.
- It can lead to higher economic growth.