Baby economics: China’s worried about falling population. India thinks it has a demographic dividend. It isn’t so simple
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It took around 50,000 years for the world’s population to hit 1 billion. But since 1960, every few years have seen an extra billion added, coming to today’s global population of 7.8 billion. Population explosion used to be a big worry, sometimes leading to extreme reactions. Infamously, China’s economic policy U-turn in 1979 was accompanied by the introduction of a draconian one-child policy. Little did China’s leaders know what lay ahead in their own lifetime. By 2016, the policy shifted to two children per couple and has now been bumped up to three – in the wake of China seeing its slowest growth of population since 1960s.
Many other societies, without coercion, have seen a dramatic fall in fertility rates. Even in India, with a far younger population than the West’s or China’s, fertility rates are in a downward trajectory. It’s an extraordinary moment in human history. Till now, human population declines have been involuntary. For example, Europe’s 14th-century plague Black Death is believed to have wiped at least one-third of the population. In stark contrast, in 2015 the EU registered its first natural population decline. Reversing the fertility trend seems impossible. Singapore unsuccessfully tried it for two decades.
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But a large population isn’t an unmixed blessing. Countries like India are painfully discovering that a demographic dividend is not preordained. Absent right conditions, you can get a demographic nightmare. True, a greying population in most countries means an adverse dependency ratio – a measure of the working age population supporting the rest. But national incomes are ultimately dependent on productivity. If, say, industrial robots replace more and more humans on the factory floor, falling population may turn out to be less of a negative economically. And a large, and largely poorly educated young population like India’s, may become even less of a dividend.
