As a demographer, it surprises me to hear a range of knowledgeable people describe Pakistan’s high rate of population growth and its youthful structure as an asset that could be an important tool in Pakistan’s development.
Proponents of this view argue that Pakistan has a large pool of working-age people, while several countries have labor shortages and need additional labor. The young age structure could therefore be a potential “demographic dividend” for the country. Their argument is generally that Pakistan has an impressive record of sending its workers abroad to generate large remittances for the country, currently estimated at $ 29.4 billion, or about 7.2% of the total. GDP. They further argue that the pool of overseas migrants from Pakistan could be expanded beyond the Gulf region to include countries such as Malaysia, Japan and others. With the aging of populations in the developed countries of the West, their need for people of working age is set to increase further, and Pakistan could meet this need by providing workers in various occupations in health care, IT and others.
While there may be some truth to the above argument, it contains several errors that must be recognized. The example of South Korea was used in Pakistan to illustrate the possibility of reaping the fruits of the “demographic dividend”. In countries like South Korea, the benefits of the “demographic dividend” have been realized under a specific set of conditions. When fertility began to decline in the 1950s thanks to an active family planning program, the population had already achieved a reasonably high level of literacy and education for both men and women, the economy was expanding and growing. new industrial enterprises were created.
In the 1970s, 85% of South Korean women and almost all men were literate. About 95 percent of all boys and girls aged 10 to 14 were enrolled in school. The participation of women in the labor market was quite high, with 61 percent of rural women and 31 percent of urban women being economically active. In the above context, the gain South Korea has witnessed in its youthful age structure, which has contributed to a productive workforce, with a reduced burden of a dependent population enabled by the declining fertility, was indeed a success.
In the case of Pakistan, fertility started to decline in the 1990s, but the decline has been slow. In 2017-2018, each woman was still producing about 3.6 children, compared to only about 2.4 children born by South Korean women in the late 1970s. Thus, the rate of fertility transition has been much slower. in Pakistan than it was in South Korea. Currently, the literacy rate in Pakistan is 51.8 percent for women and 72.5 percent for men. Only about 40 percent of boys and 34 percent of girls are enrolled in secondary school. Women’s participation in the labor force has been quite stagnant at around 20 percent. In addition, the pace of economic growth has suffered repeated setbacks, with the current rate estimated at 3.9%.
In the above scenario, a young age structure in which a majority is illiterate or with low levels of education and skills, and where 80 percent of women do not participate in the labor force, the perception of Pakistan’s youthful age structure as an asset, or dividend, is indeed dangerous and short-sighted.
The above weaknesses are reflected in the quality of migrants going abroad over the past decades. It is clear from government data and a growing body of research that at least half of all temporary migrants in Pakistan continue to be employed abroad as unskilled or semi-skilled workers. Women represent a negligible proportion of these migrants. Low-skilled migrant workers are able to return smaller remittances than the more highly skilled. In addition, the demand for low-skilled workers is declining in several host countries, and the assumption about their future absorption in foreign markets may be wrong. Demand for these workers is expected to decline further amid the economic downturn that many destination countries are facing due to the Covid-19 pandemic.
In the above context, it should be remembered that Pakistan will not be able to reap the benefits of the “demographic dividend” if it does not accelerate its fertility decline, increase the level of education and skills of its workforce, enables its women to participate productively in the workforce and achieves a high and sustained rate of economic growth. In the absence of the above, the hope of profiting from a young age structure would simply amount to wishful thinking based on some frowned upon notions of the concept.
The writer is a professor at the Lahore School of Economics.