Tuesday, November 15, 2005

India Aging?

Via Opinion Journal, Nicholas Eberstadt raises alarm about the aging of Asia.

On India, he writes:

The overall population profile will remain relatively youthful, with a median age projected at just over 30 in 2025. But this is an arithmetic expression averaging diverse components of a vast nation. Closer examination reveals two demographically distinct Indias: a North that stays remarkably young over the next 20 years, and a South already graying rapidly due to low fertility.

It may surprise some readers to learn that sub-replacement fertility already prevails in most of India's huge urban centers--New Delhi, Mumbai (Bombay), Kolkata (Calcutta), Chennai (Madras) among them. Even more surprising, sub-replacement fertility prevails today throughout much of rural India, especially in the rural South. There, graying now proceeds apace. By 2025, South India's population structure will be aging unmistakably. In places like Kerala, Tamil Nadu and Karnataka, median age will be approaching a level comparable to Europe's in the late 1980s--and around 9% of population will be 65 or older (Japan's level in 1980).


A generation before Western Europe's median age reached 35 or Japan's 65-plus set accounted for 9% of national population, however, their average per-capita GDPs were $6,000-$8,000. By contrast, the exchange-rate-based GDP per capita in Kerala and Tamil Nadu today stands at under $500 per year. Even if India, like the Japan of an earlier day, could grow its GDP per capita at an annual rate of 5.5% over the coming generation, significant parts of India would be reaching the threshold of the "aged society" on income levels almost an order of magnitude lower than Japan and Western Europe in the mid-1980s.


Since 1991, India has averaged a highly respectable 4% GDP per-capita growth rate and has become a presence in the global IT economy through enclaves in places such as Bangalore. But Bangalore--like the rest of the Indian South--is part of what may soon be known as Old India: While its labor force is relatively skilled, it is also older, and absolute supplies of available manpower will peak and begin to shrink. Other parts of India, by contrast, will have abundant and growing supplies of labor, but a disproportionate share of that manpower will be entirely unschooled or barely literate. Educated and aging, or untutored and fertile: This looks to be the contradiction--and the constraint--for India's development in the decades immediately ahead.

4 comments:

doubtinggaurav said...

PR,

It is often-discussed North-South (or to be accurate North/East and South/West)divide .
While Southern and western states have invested heavily in social infrastructure and as a result have improved on almost all social paramteres, North (and East) have neglected social development,the result being they are laggard in all social or economic parameters.

Having said that, I think talking about ageing of India is little premature.

Regards

libertarian said...

PR,
Demographics are the key to the rest of this century. The North-South divide is troubling, but not entirely unpredictable. Education and raised living standards almost certainly imply lower birth rates and longer life expectancies. Thus education of the masses, especially in the Bimaru states, becomes a national imperative. We fail there, and we've got a serious problem on our hands.

dg, cannot agree with you. China is going to face this population bust in the next 20 years (median age of 32.26) - and it's not going to be pretty. If we don't set the stage early, we'll have similar catastrophic results.

Jaffna said...

I am no demography expert but the trends in south India appear to approximate Sri Lanka, Singapore, China, Japan, Taiwan, Korea and Hong Kong. The issue of an aging productive workforce will need to be addressed given the rise in number of elderly dependencies relative to the active workforce and pension payments. However, north India's relatively youthful population would mean that south India will be able to tap that reservoir of labor for its purposes, much like West Europe had earlier relied on it former colonial dependencies for unskilled labor. All it takes is forward planning.

Dilip D'Souza said...

Primary Red, on a somewhat related note, I had this post a few months ago: Vastly Different.

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