Cashing in on the Demographic Dividend: Is Bangladesh Moving in the Right Direction?

Abstract:The demographic dividend contributes to a nation’s economic performance by increasing its per capita income, savings and investments. In recent decades, Bangladesh, like other South Asian countries, is passing through its demographic dividend phase, which can promote overall sustainable socioeconomic development of the country. This window of opportunity has a dynamic comparative advantage for Bangladesh compared to its corresponding countries vis-à-vis the youth labour force. This paper conducts a situational analysis of the demographic dividend in Bangladesh by examining data on labour market, savings rate and human capital from different national and international sources. The results from the situational analysis indicate that Bangladesh is yet to realize the demographic bonus. Currently, the country is suffering from higher youth unemployment, lower human capital development, shortage of skilled labour force, lower female labour force participation and fluctuating savings rate, all of which impedes the favorable impact of the demographic dividend on economic growth. The findings of this study depict a path for policymakers and stakeholders to prioritise to fully reap the benefits of the demographic dividend and achieve long-term socioeconomic development of the country.