Youth Bulge: a demographic dividend or a demographic bomb?

Introduction

Every country gets one chance at a demographic dividend. It arrives when a large generation of children grows into working adults and the number of dependants per worker falls. Pakistan is in that moment now. According to the 2023 census the population stood at about 241 million, and the UNDP's National Human Development Report estimated that around 64 percent of Pakistanis are below the age of 30. Whether this youth bulge becomes a dividend or a bomb is not decided by demography. It is decided by policy. A young population is like a powerful river: channelled, it irrigates and lights up a country; left unchecked, it floods it.

Understanding the youth bulge

Demographers describe a transition in which death rates fall first, thanks to better health and nutrition, while birth rates stay high for a while. The result is a bulge of children who, some fifteen to twenty years later, become a bulge of young adults. If fertility then declines, the share of working-age people in the population rises sharply. Economists call the growth this can unlock the demographic dividend: more workers, fewer dependants, more savings and more investment. The window does not stay open forever; within a few decades the same generation grows old.

Why the youth bulge can be a dividend

The clearest evidence comes from East Asia. Studies of the "East Asian miracle" attribute a large share of the region's growth between the 1960s and 1990s to favourable demography. South Korea, Taiwan and later China combined a growing young workforce with mass education, export-oriented industry and high savings. Their young people did not wait for jobs; factories, ports and schools were built for them.

A young population also brings energy that older societies lack. Pakistan already has one of the largest freelancer communities in the world, and its IT and IT-enabled services exports have grown steadily. Young people adopt new technology faster, start businesses, and drive cultural and political change. Movements for transparency, climate action and women's rights in Pakistan have been led largely by the young.

Finally, a working-age majority can finance the state. More taxpayers, more contributors to pension and insurance systems, and more consumers make a larger domestic market. For a country that struggles to raise revenue, this is an opportunity that will not come again.

Why it can become a bomb

The same numbers can turn dangerous. Every year well over a million young Pakistanis enter the labour market, and the economy has rarely grown fast enough for long enough to absorb them. When graduates drive ride-hailing cars or wait for years for a government post, education loses its value in the eyes of the next generation.

The problem begins in childhood. Pakistan has one of the highest numbers of out-of-school children in the world — estimates commonly cited by UNICEF and national surveys put the figure at over 20 million. Many of those in school do not acquire basic reading and arithmetic. A generation without skills cannot be productive, no matter how large it is.

Unemployed, frustrated young men are the raw material of extremism, crime and political violence. Research on youth bulges has found that societies with large shares of young adults and few opportunities face a higher risk of unrest. Pakistan's experience with militant recruitment in poor districts, and with street agitation in its cities, illustrates the danger.

The most talented often leave. The Bureau of Emigration and Overseas Employment registered more than 800,000 Pakistanis going abroad for work in each of 2022 and 2023, including doctors, engineers and IT professionals. Remittances help the balance of payments, but the country loses the people it trained at great cost.

Where Pakistan stands

Pakistan's difficulty is that its fertility has fallen slowly, so the window is opening late and the bulge keeps growing. Economic growth has followed a boom-and-bust cycle tied to balance-of-payments crises and IMF programmes. Public spending on education has hovered around two percent of GDP, below the four to six percent recommended internationally. Female labour force participation is about a quarter, among the lowest in the region, which means half of the potential dividend is simply not counted.

The way forward

First, learning before everything. Getting out-of-school children into classrooms and ensuring that every child can read and do arithmetic by the end of primary school is the foundation of any dividend.

Second, skills that employers want. Technical and vocational training, reformed through bodies such as NAVTTC, must be designed with industry, include apprenticeships and be recognised abroad, so that even migration becomes skilled migration.

Third, job-rich growth. Small and medium enterprises, agricultural value chains, construction, tourism and IT exports create jobs faster than capital-intensive industry. Easier credit, simpler regulation and stable energy prices matter more for these sectors than tax holidays for a few large firms.

Fourth, women at work. Safe transport, childcare, flexible and remote work, and protection from harassment can bring millions of educated women into the economy.

Fifth, a voice for youth. Empowered local governments, student unions and youth councils give young people a stake in the system rather than a reason to reject it.

Sixth, voluntary family planning and better maternal health, so that the bulge eventually becomes a balanced population rather than a permanent pressure.

Conclusion

A youth bulge is a question that demography asks and policy answers. East Asia answered it with schools, factories and discipline, and reaped a dividend. Countries that answered it with neglect reaped unrest and emigration. Pakistan still has time to choose, but the window is not permanent. If the state invests now in learning, skills, jobs and inclusion, today's young millions will be the engine of tomorrow's prosperity. If it does not, the same millions will be the measure of what was lost.