Q32 (CDS-II/2019) Economy › Growth, Development, Poverty & Employment › Demographic transition Answer Verified

What do you mean by 'Demo- graphic Dividend'?

A rise in the rate of economic growth due to a higher share of working age people in a popula- tion

A rise in the rate of literacy due to development of educa- tional institutions in different parts of the country

A rise in the standard of living of the people due to the growth of alternative livelihood practices

A rise in the gross employ- ment ratio of a country due to government policies

Result

Your answer: — · Correct: A

Explanation

The term 'Demographic Dividend' refers to an episode of accelerated economic growth resulting from shifts in a population's age structure [2]. This phenomenon occurs when the share of the working-age population (typically defined as ages 15–64 or 20–59) is significantly larger than the non-working-age share, which includes children and the elderly [3]. This shift reduces the dependency ratio, meaning fewer dependents are supported by each worker, thereby increasing the potential for productivity, savings, and investment-led growth [5]. While factors like literacy and government policies are essential to harness this potential, the dividend itself is fundamentally defined by the demographic transition toward a higher proportion of productive individuals relative to dependents [6]. India is currently experiencing this phase, with its working-age population expected to peak around 2041 [1].

Sources

[1] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 8: Inclusive growth and issues > Recent demographic trends > p. 259
[2] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 19: Population and Demographic Dividend > DEMOGRAPHIC DIVIDEND > p. 572
[3] https://en.wikipedia.org/wiki/Demographic_dividend
[4] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 19: Population and Demographic Dividend > Challenges Related to Demographic Dividend > p. 573
[5] https://policy.desa.un.org/publications/frontier-technology-issues-harnessing-the-economic-dividends-from-demographic-change
[6] https://www.investopedia.com/terms/d/demographic-dividend.asp

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What do you mean by 'Demo- graphic Dividend'?

Explanation

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