I found this to be really interesting. Via RAND:
Demographic contrasts between China and India will become more pronounced in the coming decades, and these differences hold implications for the countries’ relative economic prospects. China’s population is larger than India’s, but India’s population is expected to surpass China’s by 2025. China’s population is older than India’s and beginning to age rapidly, which may constrain economic growth, whereas an increasing percentage of India’s population will consist of working-age people through 2030, giving India an important demographic advantage.
The report expands on this idea:
Reflecting this changing age composition, the two countries will experience different patterns in the percentage of population that is of working age (customarily ages 15–64). In China, this percentage peaked in 2010, at 73 percent, and is beginning to decline; by 2035, it is expected to fall to 60 percent. By contrast, India’s working-age population as a share of the total population is gradually increasing. From its 2010 level of 65 percent, the percentage of people of working age is expected to increase gradually; to crest at about 68 percent around 2030 — the same year that India will surpass China on this statistic; and then to decline slowly.
Demographic Dividend or Drag? What These Differences Imply for Each Country’s Future Economic Prospect
When a growing share of a country’s population reaches working age, conditions may be ripe for that country to reap a “demographic dividend” — that is, to realize income growth and savings because a higher proportion of its population is able to contribute to the economy. From this standpoint, for the next several decades, China’s demographics will not be more favorable for supporting economic growth than they are now. A high ratio of working-age people to dependents contributed significantly to China’s economic growth in the past two decades, but China’s proportion of working-age people is at its peak and will soon begin to decline.
Moreover, China is now entering an era when its rapidly aging population — leading to rising ratios of dependents to workers and rising health costs for the growing cohort of elderly — could constrain economic growth. Savings rates may fall as a larger fraction of the population begins to use savings for retirement, thus reducing the flow of private capital into investments, while the government also diverts more of the budget from public investment to pension and health payments. In addition, the elderly in China (as well as in India) traditionally rely on family members to care for them in old age. If adult children divert more of their time and money toward taking care of their elderly parents rather joining the modern labor force, the forecasted rates of economic growth may not materialize.
In India, by contrast, the demographic window of opportunity is still wide open. India will have an important demographic advantage — an increasing percentage of working-age people — that will produce favorable conditions for a demographic dividend until around 2030, when the ratio of working-age people to dependents is expected to peak.
Something to think about.





