Reaping the Demographics
Dividend through Education
Maaz A. Minhas
Pakistan has a great demographic opportunity for rapid economic progress as its growing population enters adulthood. However, mass illiteracy and issues of undereducation can cripple the vast potential of the nation’s youth. How well the country is able to educate its public will determine its ability to maximize the benefits of its demographic dividend.
What is the demographic dividend?
According to the United Nations Population Fund (UNFPA), demographic dividend means the economic growth potential that can result from shifts in a population’s age structure, mainly when the share of the working-age population (15 to 64) is larger than the non-working-age share of the population (14 and younger, and 65 and older).
As the working-age population of Pakistan is expected to multiply over the next 30 years, and its dependent population segments expected to decline, it can reap immense benefits from its potential demographic dividend.
How education helps capture demographic dividend?
A well-educated public is a prerequisite for any country that wants to realize its demographic dividend. In today’s information age, knowledge is the most critical skill one must attain to prosper. Developed nations have actually transformed their economies into knowledge-based economies. Only extensive education can provide sufficient knowledge needed to succeed today. Moreover, the modern workplace demands an increasingly specialized set of skills from the general workforce. So, academic specialization and vocational training programmes have become more important than ever. Education, in addition, contributes to formalization of economy. Educated workers are more likely to work in the formal sectors of the economy than in informal sectors. This can increase productivity as well as the nation’s tax base, which may help increase overall employment and growth. These are just some of the ways education helps the overall economy of the country and captures the demographic dividend.
Case Study: South Korea provides one of the best examples of a country where education played a critical role in capturing the demographic dividend. In 1950, the population age structure in South Korea resembled that of present-day Pakistan. Like Pakistan now, its literacy-rate was around 55%. However, South Korea invested heavily in education. At the school level, it got rid off the multi-tiered Japanese education system, and shifted towards an egalitarian education system. At the college and university level, it encouraged mass enrolment, research, and specialization. It has the highest percentage of college-degree holders among OECD countries. Such investments and improvements in its education system has led to enormous economic rewards for the country. Since 1950, its GDP-per-capita has grown by over 2200 percent, and its economies has been among the fastest growing in the world during this time period.
The grim scenario if education is neglected
The demographic dividend is not something to be taken for granted. A large working population does not automatically translate into economic progress. If the labour lacks sufficient education and training, economics gains become hard to achieve. In fact, mass unemployment, poverty, and civil unrest ensue in a community deprived of adequate levels of education. Instead of contributing to the economy, such a population becomes a burden on it. The conditions of the countries in the Sub-Saharan region illustrate the grim scenario if education is neglected.
The burden of the population on the economy is felt, in particular, in the long-run. Let us consider the case of Pakistan. At present, over 60% of the population is under the age of 25. If this population is left uneducated and untrained for professional life, it would struggle to make ends meet. The situation would worsen drastically when this population group crosses the age of 60 and retires. It would be out of work and have low savings, diminish its contributions to the national economy, and impose an increasing strain upon the national health services. As the birth-rates are steadily declining, there would be a smaller working age population in the next 40 years or so to support this large retired population segment. Under such circumstances, the survival of the country would become very tough. Instead of realizing a demographic dividend, the nation may be imperilled by a demographic disaster.
The way forward
Only proper education and skill-development of the large youth and working age population of Pakistan can help to transform our economic fortunes. Various measures are suggested below, which can help improve the education and training of our young generation.
1) First of all, the state must substantially increase its budgetary allocation for the education sector. The current allocation is 2.4 percent of the national GDP. This is simply not enough to cater to the requirements of the population in excess of 200 million. This allocation must increase to atleast 5% to see a significant improvement in the education levels of the general public.
2) Mismanagement of resources must also be curtailed. The per child cost of education in public schools is 3 times that of the cost in private schools (approximately Rs 25000), even when the quality of education in public schools is far worse. Crucial funds are also wasted due to widespread corruption in the sector, for example, through ghost schools and ghost teachers. Information technology tools, such as finger-print scanners for teachers and geo-mapping of schools, can further enhance efficient use of funds.
3) There is also an urgent need for critical education reforms. Our education system must imbue pupils with necessary moral values. Here, adopting the Japanese model on moral education may help. Schools must also encourage the development of the physical abilities of its students. A healthy and energetic population is very important for a nation’s economic progress. Moreover, instead of just focussing on rote-learning, the school curriculum must cultivate necessary analytical skills in the pupils. The cumulative development of the physical, mental, and spiritual abilities of the pupils is critical for the development of human capital. It is also essential that the curriculum of both school-level education and that of higher education encourages research and innovation.
4) The coverage of the education system must be expanded outside of big cities and into smaller cities and rural areas. To encourage enrolments, the government may provide financial incentives to families to encourage them to send their children to school. Aside from providing pupils from poor backgrounds with simple cash payments for attending schools, they could be provided with Child Development Accounts. Such accounts would offer higher returns and encourage savings among families.
5) Moreover, higher education institutions need to focus more on needs-based skill development, skills that would contribute most effectively towards the economic growth of the country. For example, given the immense potential in the nation’s agricultural sector, colleges and universities need to invest more in fields such as agricultural engineering and seed technology etc. Short-term vocational training programmes can also help inculcate essential skills, especially skills related to information technology, in the workforce, such as expertise in Microsoft Excel and certain business software.
6) Special attention to girl’s education can further enhance the skill-set of the working-age population in the country. Presently, only about 4% of females- less than half the number of males- have a university degree. Mass-awareness programmes are needed to enlighten communities about the importance and benefits of productive female participation in the workforce
7) Collaboration among the public and private sectors, and non-governmental organizations can play a significant part in achieving the aforementioned goals and targets to improve education in the country. Public schools can learn from private schools on how to better manage their finance and reduce their costs. Non-governmental organizations, such as The Citizens Foundation, can play a critical role in expanding the network of schools into remote and backward regions of the country.
Demographic dividend is not automatic; it is a window of opportunity. Pakistan stands at a critical juncture. It must transform its education sector and successfully educate and train its youth, to reap the enormous rewards of the demographic dividend.