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MANAGING THE DEMOGRAPHIC BONUS
In almost all countries in Southeast Asia, a phenomenon called the demographic bonus or demographic dividend has had a positive impact on economic growth. This demographic phenomenon has been a constantly debated topic among policymakers, researchers and other stakeholders. However, a demographic dividend will not last forever. During this period, the identification of socio-economic policy instruments that yield the maximum out of the demographic dividend is a priority. This is a challenging task for any developing country and Sri Lanka is not an exception.
What is
the issue?
  • According to the trends in the age structure, Sri Lanka is currently experiencing the first demographic dividend with a large working age population, which could raise total GDP, if productively employed.
  • Some demographers argue that the demographic dividend will last only until 2017 but other analysis show that it will continue till 2037 as depicted by the above graph.
  • Although the percentages of children less than 15 years of age and the elderly population aged 60+ years of age, respectively equilibrate in 2025, a noticeable decline of the percentage of working age population is only discernible from 2037, while the child population tends to stabilize around 15 percent only after 2037.
  • This evidence confirms that the duration of the first demographic dividend is 45 years from 1992 to 2037.
Sri Lanka is left with another 23 years if the country desires to benefit from this historically produced demographic bonus
What needs to be
done?
  • The benefits of the demographic bonus are not automatic but policy dependent and hence the window of opportunity to reap the benefits of a large working population needs to be made use of productively. For this, investments need to be made with proper analysis of population dimensions, which ensure sustainable economic development that will enable the country to face future demographic challenges.
  • The economic gains arising from this dividend can be realized only if employment opportunities expand as rapidly as the numbers seeking new jobs. Sri Lanka’s situation is quite favourable right now since the rate of unemployment is relatively low.