The common link between policies conducive to both the demographic dividend and fertility transition

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A window of opportunity for fast economic growth is created by sustained fertility decline. However, its realization depends upon the quality (education and skills) of the labor force and economic policies. Fertility decline from about 6 to 2.4 births between the 1960s and 2011 in India has raised the prospects of a demographic dividend, although the timing and the pace of fertility decline have not been uniform among the major states. Consequently, the potential for reaping the benefits of a demographic dividend also differs among states. This chapter traces the common link between policies that contribute to fertility transition and create the right kind of environment for reaping the benefit of a demographic dividend. The data used for major states in India suggest this link to be the early investment in social development (education and health). For example, southern states made earlier investments in social development and experienced fertility transition early. They now have a better-educated labor force and hence are reaping the benefit of a demographic dividend by transforming the window of opportunity into faster economic growth. By contrast, northern states did not invest adequately in social development early and are now lagging behind in both fertility transition and the quality of the labor force. They are not ready to reap the benefits of a demographic dividend. These state-level differences have implications for national-level trends.