Demographic dividend: How do we include more youth into Bangladesh's economy?
For several reasons, the recently conducted Population and Housing Census 2022 of Bangladesh was of interest to people in different sectors, especially the policymakers and researchers. This is primarily because census data can be a crucial source of information not only for academic research, but also for effective policymaking. Besides this, due to the change of population structure over time, there is growing attention towards the transition of demographic profile, which can be better understood through the information gathered in censuses.
We already know that Bangladesh is going through a demographic transition, under which there has been a gradual shift from a high mortality and high fertility scenario to a low mortality and low fertility one, resulting in a slowing down of population growth and an increase in the proportion of people within the age range of 15-64 years. This change in demographic profile has also been reflected in the recent census data: according to the 2022 census, the proportion of the working-age population is 65.53 percent, which was 60.62 percent in the 2011 census. The dependency ratio, which is the ratio of working-age population (15-64) to the dependent population (0-14 years and 65 year and above) has declined considerably from 73.00 in 2011 to 52.64 in 2022. This demographic shift can have important implications on the economy, as this working-age population, through effective investment in human capital development, can be translated into a productive labour force. Through higher savings and greater investment in growth-enhancing activities, this labour force can eventually lead the country towards a higher growth trajectory.
However, we must also keep in mind that, for Bangladesh, this window of demographic opportunity will close around 2040, therefore the policy focus must be on investing in the youth population and creating employment opportunities for them. In this context, it is worth noting that, in terms of the "quality" of our youth, as high as 8.79 percent within the age range of 15-29 years have no formal education, and only 5.9 percent have tertiary education (Labour Force Survey 2016-17).
According to the preliminary results of the census, among those above seven years of age, around two-thirds (74.66 percent) have basic literacy. Though this figure shows significant progress over time (the literacy rate was found to be 51.77 percent in the 2011 census), it reflects our inability to effectively reap the fruits of demographic transition. The census data, however, reveals an optimistic scenario in terms of expansion and usage of technology of the population: 72.31 percent of adults (86.72 percent male and 58.83 percent female) were found to use mobile phone devices, and 37.01 percent were found to use the internet in recent times (46.53 percent male and 28.09 percent female). Despite the gendered segregation of such usage, this reflects a positive scenario in terms of skills development of the population. Nevertheless, we must keep in mind that technology usage does not guarantee possession of technical devices, nor does it confirm access to knowledge for skills development.
In addition to ensuring the quality of the working-age population, one crucial condition for exploiting the opportunities of positive demographic transition is the ability to utilise the youth population for the country's development while creating suitable employment opportunities. In this context, with the low level of private investment and slow pace of industrialisation, the capacity to create jobs is rather limited (employment elasticity of growth for 2013-2017 was around 0.17, with a declining trend over time). It's also worth mentioning that it's not only the quality of the working-age population or a lack of employment opportunities, but also the mismatch between demand and supply sides that leaves a gap in the effective utilisation of a favourable demographic profile.
An important as well as interesting finding of the 2022 census was that the sex ratio declined to 98.00, with 50 percent of the total population being female. As for the youth population, as high as 16.76 percent of females were found to be within the range of 15-24 years (24.67 percent within 15-29 years), where the corresponding percentages for males were 14.77 percent (21.23 percent within 15-29 years). With female labour force participation in Bangladesh being only 36.3 percent (male participation rate being 80.5 percent), the challenge of reaping the benefits of demographic transition hinges partially on investing in the development of human capital of female youth through education and training. However, gender-centric norms prevailing in society remain the real challenge for the female youth, which prevents and discourages women to acquire skills and education, and particularly to engage in the mainstream labour market. As a consequence, or at least partly so, as high as 49 percent of females aged 15-29 years were found not to be in education, training or employment, reflecting a loss of potential youth workforce and an inability to reap the benefits of demographic transition.
Based on the preliminary findings of the latest census, and comparing its findings with the previous census, it can be inferred that, though there has been a gradual transformation of our demographic structure in favour of a young labour force, due to impediments on both supply and demand sides, we might partially miss this opportunity. It is, therefore, of paramount importance to prioritise the needs of the youth population in both national planning and allocation processes. In this regard, the importance of investing in skills development and education while focusing more on the quality of education cannot be emphasised more. With the increased automation of industries and the importance of 4IR-related technologies, greater concentration is needed in updating the existing curricula of training programmes, providing skills training for the trainers, introducing internationally acceptable certifications, introducing 4IR-related sophisticated skills in education and training, and, more importantly, dealing with the challenges of skill mismatch. Besides this, to reorient education programmes catering to the necessities of the labour market, increased emphasis is needed on training programmes involving cognitive and interpersonal skills.
The Technical and Vocational Education Training (TVET) programmes must be at the core of the strategies concerning the youth labour force. In this context, it is extremely crucial to deal with the social stigma attached with TVET programmes, and a greater incentive is needed for this. In addition to the policy initiatives to prepare our labour force to meet growing needs, it is crucial to stimulate private sector investment, as well as to provide monetary and non-monetary incentives, like low-interest credit, information facilities, tax rebate, etc to small-scale entrepreneurs.
To remove the bottlenecks in boosting female employment, the prime focus must be given towards dealing with certain inherent constraints like child marriage, and safety and security in the public sphere, along with policy interventions to deal with the challenges related to gender-centric norms. In relation to the latter, innovative policies like linking the financial incentives (e.g. tax rebate and exemptions, subsidies) to gender-sensitive strategies such as daycare centres at workplaces, child care vouchers, flexible working hours as part of post-maternity employment, etc can be considered.
Dr Sayema Haque Bidisha is a professor at the Department of Economics of Dhaka University.