DEMOGRAPHIC DIVIDEND : Reaping maximum benefits

BANGLADESH is at a crossroads in its development trajectory. The country is passing through a viable demographic dividend as nearly 65 per cent of its population fall within the working age of 15–64 years. Yet the advantages of this dividend are yet to be tapped. The question confronting policymakers is straightforward but urgent: is this demographic window opening or is it quietly, almost imperceptibly, closing? A dividend remains only a promise when its youth cannot fully participate in the economy.

The Bureau of Statistics Population and Housing Census 2022 shows that the 15–24 years of age group stood at 19.11 percent while the 25–34 years of age group made up 16.05 per cent of the population which shows a clear phase of a demographic dividend as a third of the population is youth. The 2022 Labour Force Survey, which is the latest, depicts that the youth labour force, aged between 15 and 29 years, stands at 36.53 per cent of the total labour force of 73.05 million. The percentage of the youth not in education, employment or training is 47.6 in rural areas and 52.4 in urban areas. For years, demographic optimism has been supported by impressive shifts in population structure. Bangladesh’s dependency ratio has fallen from 78 per cent in 1990 to around 47 per cent now, indicating fewer dependents per worker and greater productive potential.

But the numbers mask an uncomfortable reality: the labour market has not kept pace. Youth unemployment officially hovers around 10 per cent while graduate unemployment has reached an alarming 33 per cent, according to various labour force surveys. Behind the figures are thousands of young people holding degrees but lacking opportunities, trapped in a cycle of disappointment and uncertainty. A growing youth population without matching job creation becomes a burden rather than a blessing.

A major driver of this crisis is the persistent mismatch between education and employment, as the Centre for Policy Dialogue executive director has said. Although tertiary enrolment has risen sharply, with more than 4.3 million students now in higher education, employers repeatedly highlight gaps in job-ready competencies. Many graduates lack proficiency in English, digital literacy, analytical reasoning and industry-specific technical skills. Meanwhile, only 17 per cent of the young people are enrolled in any form of technical or vocational training, leaving the vast majority unprepared for the evolving labour market. Numbers enrolled in universities mean little when the skills that they produce do not match the skills that employers need.

Automation is deepening this vulnerability. As global manufacturing shifts towards advanced technologies, labour-intensive economies such as Bangladesh face rising risks. Studies indicate that 47 per cent of existing jobs may be susceptible to automation in the coming decades. In the apparel sector,  the backbone of Bangladesh’s exports and employer of millions, automation and digital manufacturing are reducing the demand for low-skilled labour. Unless the country transitions to higher-value production, young workers may increasingly find themselves displaced rather than absorbed. When machines accelerate and skills stagnate, the future of work tilts sharply away from the unprepared.

The rural-urban divide compounds these challenges. While cities like Dhaka and Chattogram serve as magnets for opportunity, nearly 60 per cent of young Bangladeshis live outside major urban centres, often with limited access to quality training, career counselling or modern industries. Many migrate internally, adding pressure to overcrowded cities, while others pursue opportunities abroad through expensive migration channels that frequently expose them to exploitation. Without targeted rural development, the demographic advantage risks becoming geographically lopsided. Growth cannot be inclusive when opportunity is concentrated to only a few corners of the map.

In the international arena, Bangladesh faces increasing competition. Countries like India, the Philippines and Vietnam are expanding their digital and manufacturing capabilities, aggressively investing in upskilling their populations. To stay competitive, Bangladesh must reposition itself strategically in emerging sectors such as digital services, green technology, agro-processing and logistics. With the global green economy projected to create 24 million jobs by 2030, the country cannot afford to lag behind. The global race for human capital rewards those who reform early and punishes those who wait.

Reversing the drift and transforming the demographic moment into meaningful progress require comprehensive reform. The first step is a bold restructuring of the education system to align learning with employability. Curriculums must emphasise critical thinking, ICT proficiency, English communication and practical problem-solving. Industry-academia partnerships need formal institutional backing so that graduates enter the market with experience rather than mere certificates. Education fulfils its purpose only when it prepares learners for the economy they will face, not the world that no longer exists.

Bangladesh also needs an integrated national skills strategy. Short-term training, apprenticeships and technical certification programmes should be scaled nationwide. Countries that successfully harness their demographic dividend, such as South Korea and Singapore, invested early and heavily in skills development. Bangladesh must do the same. Entrepreneurship should be treated as a pillar of the national development. With only around 7 per cent of the youth engaged in entrepreneurial activities, the country is far below its potential. Expanding access to finance, simplifying business regulations and establishing regional start-up hubs could unleash a wave of innovation-driven employment. A single enterprise created by a young person is a multiplier of jobs, confidence and national resilience. Bringing women into the mainstream economy must become a non-negotiable priority. Safe transport, workplace protections, flexible hours and childcare support would help millions join the work force. The countries that succeed economically invariably succeed in empowering women.

Addressing regional disparities will require strengthening rural infrastructure, digital connectivity and local industries. Higher-speed internet, rural training centres and modernised agriculture could absorb large numbers of young people where they already live. Climate-resilient development must be incorporated into the economic strategy. With one in seven Bangladeshis projected to be displaced by climate impacts by 2050, creating green and adaptive jobs is essential. ‘A nation vulnerable to climate shocks must build an economy capable of withstanding the storms ahead.’ To fully reap the benefits of the demographic dividend, policymakers and stakeholders should give proper attention to investments in human capital, promote job creation, address gender inequality, ensure a safe working environment, matching education and job, and strengthen governance and planning.

Bangladesh’s demographic dividend is not ever-lasting. It is a fleeting window, the benefits of which depend entirely on timely and decisive actions. If the country invests boldly in its youth, their skills, their opportunities, their safety and their aspirations, this dividend could transform the nation’s trajectory. But, if reforms are delayed, the window may close before its potential is realised, leaving behind a generation of unfulfilled promise.

Dr Md Moniruzzaman (dr.moniruzzaman@bigm.edu.bd), is a professor and Md Mominur Rahman (mominur.rahman@bigm.edu.bd) is an assistant professor at the Bangladesh Institute of Governance and Management.