International Relations

South Asia and India risk wasting their demographic dividend, according to the World Bank

  • The World Bank has launched the ‘Job for Resilience Report’. The report discusses how the South Asian region, especially India, is not capitalising on its demographic dividend.
  • The rate of job creation in the region dropped far behind the rise in the working-age population, despite a high 6.0-6.1% growth forecast for 2024-25 in its South Asia region. 

The main results in this paper are:

South Asia’s labour markets as emerging and growing economies:

Declining employment ratio:

  • Despite a 6% post-pandemic rise, employment in South Asia fell between 2000 and 23. While most EMDEs stayed steady, South Asia fell by 2%, with variations within. 
  • Low employment ratios: With the exception of Nepal, South Asian nations have much lower employment ratios than other EMDEs, with South Asia’s ratio at 59%, significantly lower than the global average of 70% in 2023.
  • Employment weakness for men and women: In South Asia, men’s employment ratios have fallen over the last two decades in comparison to other EMDEs. Women’s ratios, which remain chronically low and are half those elsewhere, are chiefly responsible for South Asia’s lower overall employment rate.
  • A missing growth engine: In the 2010s, South Asia saw a rise in labour productivity growth, which then fell below the EMDE average between 2020 and 2023. Unlike other EMDEs, South Asia’s output development was mainly reliant on rising labour productivity and an expanding working-age population. However, lowering employment ratios slowed production growth. 

Report on Indian Scenario: 

  • Trends in employment and labour productivity: India’s employment growth was poor in the 2010s but recovered after the epidemic. The employment ratio fell dramatically until 2022, then slightly rebounded by 3 percentage points in 2023.
  • Migrant workers in India returned to rural areas, and emigration from rural areas halted during the pandemic.5 Following Nepal, India has the region’s second-largest share of agricultural labourers (44%).
  • Employment composition: Public investments, relaxed labour restrictions, and contract labour all help to boost India’s industrial employment. The services sector, which includes IT, BPO, and healthcare, relies on a professional workforce and digital infrastructure, restricting prospects for unskilled labour. 

Measures to resolve the difficulties identified in the report: 

  • Skill Development Programmes: Implementing significant skill development programmes to provide the workforce with the abilities required by the changing employment market, with a focus on both technical and soft skills.
  • Labour Market Reforms: Constantly examining and revising labour legislation to achieve a balance between preserving workers’ rights and creating a favourable environment for job growth and investment.
  • Implementing policies to promote inclusive growth, with a special emphasis on increasing women’s workforce participation through measures such as affordable childcare, flexible work arrangements, and tackling cultural barriers.
  • Infrastructure Investment: Continued investment in infrastructure development to support industry and service expansion, resulting in greater job possibilities, particularly in rural areas.
  • Enhancing Productivity: Putting in place measures to boost productivity across industries through technical developments, innovation, and efficient resource allocation. 


The World Bank warns that South Asia, especially India, risks losing its demographic dividend due to deteriorating employment ratios and slow productivity development. Urgent action is required: skill development, labour reforms, inclusive growth promotion, infrastructure investment, and productivity enhancement.


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