A forecast for Bangladesh’s ageing population and new births

Bangladesh is frequently acknowledged as a role model by Western nations for effectively reducing fertility rates, particularly in contrast to the high population growth rates in Africa. 

In 2019, German Development Minister Gerd Müller publicly commended Bangladesh, noting the Muslim-majority country's significant progress in reducing its fertility rate over the preceding five decades.

"Bangladesh has brought down the fertility rate from about seven births per woman to 2.1 births per woman, which is almost the European average, over the past 50 years," he said. 

Interestingly, despite achieving seemingly significant success, Bangladesh has always fallen short of meeting its desired total fertility rate (TFR). 

TFR is the average number of children that are born to a woman over her lifetime if: they were to experience the exact current age-specific fertility rates through their lifetime and they were to live from birth until the end of their reproductive life.

According to the 2014 Bangladesh Demographic and Health Survey, conducted under the authority of the National Institute of Population Research and Training (NIPORT) of the Ministry of Health and Family Welfare, Bangladesh had the target of achieving a TFR of 1.7 by 2021.

However, data from the "Bangladesh Sample Vital Statistics 2022" by the Bangladesh Bureau of Statistics (BBS) indicates that the TFR among women aged 15 to 49 was 2.05 in 2021. The latest survey, published in June this year, reports an increase to 2.15 in 2022.

Thus, while major economies such as China, the US, Japan, Italy and France are grappling with the demographic challenges posed by declining birth rates, Bangladesh finds itself in a unique position. The higher birth and fertility rates observed in the country run counter to its efforts to control population growth.

At the same time, the increased number of babies born during the pandemic years is expected to contribute to a rise in the working-age population, which will play a crucial role in caring for individuals aged 60 and above.

Conversely, Bangladesh's ageing population is also increasing rapidly, as it is estimated that Bangladesh will transform into a full-fledged ageing society in 2048. At present, 9.29% of the total population in the country is 60 years or older, which will increase to 22.2% in 2061.

Hence, the recent surge in births amid the ageing population in Bangladesh prompts consideration of whether it is a positive development for the country, contrasting with the concerns of many developed nations facing declining populations.

Consulting experts revealed that the issue is more complex than it initially appears. Although a higher percentage of working-age people benefits Bangladesh, prioritising further reduction in the fertility rate remains crucial. 

More importantly, Bangladesh needs to make the best use of the upcoming decades to transform the present youth into human capital, invest in health and education, and formalise the economy to prepare for an ageing population and potential challenges in the future.

According to economist and demographer Dr Ronald D Lee, a professor at the University of California, Berkeley, the declining birth rate has generated a demographic dividend in Bangladesh, as the population of working age has grown more rapidly than the population as a whole. 

"The support ratio is the ratio of workers to consumers, and this has risen in recent decades at about 0.3% to 0.4% per year, giving a boost of this size to the growth rate of per capita consumption, above and beyond productivity growth rate for the labour force," Dr Lee told The Business Standard. 

According to the Population and Housing Census 2022, the support ratio was 11 in 2022. 

In terms of the median age of its population, Bangladesh appears younger compared to many other countries, including the US. With a median age of 27.9 years, Bangladesh compares favourably to India, which has a median age of 28.7 years. In contrast, European countries and the US have considerably higher median ages, ranging from 38.5 years to 55.4 years.

Dr Mohammad Mainul Islam, former chairman of the Department of Population Sciences at the University of Dhaka, also acknowledged the advantages of Bangladesh having a higher percentage of working-age people. 

However, he emphasised that this advantage can only be realised if the country invests in quality education and transforms its youth population into human capital.

"Of every five people, one is aged between 15 to 24 years in Bangladesh. If we want to use these youths as assets, we need to give them quality education to meet global skill needs as well as ensure good health and nutrition," he said. 

And to make sure this happens, Bangladesh doesn't have much time left in hand. "This [demographic dividend] will come to an end by 2035, however, as population ageing becomes more costly, and the support ratio will begin to decline," Dr Lee warned. 

Dr Jonathan Cylus, co-author of the paper 'Health, an ageing labour force, and the economy: Does health moderate the relationship between population age-structure and economic growth?' also spoke along the same lines. 

According to him, the danger for developing countries is that they get old before they get rich. Over the next two decades, while the share of the population at older ages will increase in Bangladesh, the working-age population aged 15 to 64 will also grow in size as a percentage of the total population – which means more people at ages that are typically economically productive. 

"Bangladesh needs to take advantage of the next two decades while its working-age population is growing to invest in health and education, to support human capital development, to formalise the economy and develop the structures and institutions that need to be in place once the population is older," said Dr Cylus, the head of the London Hubs of the European Observatory on Health Systems and Policies. 

However, thanks to the slight rise in fertility rate lately, Bangladesh's situation will not be as bad as countries like China or Japan. "The rate of [support ratio] decline in Bangladesh will be slow and mild, in contrast to East Asian countries, and not a big concern," said Dr Lee. 

It is estimated that the support ratio will reduce to six in 2040 and three by 2065.

Dr Lee further described that the demographic change will most likely reduce the growth rate of GDP. The population growth rate in Bangladesh is now about 1%/year, but it is dropping steadily and is projected to fall to 0.5% per year by 2040 and to turn negative by 2080 (according to UN projections). 

"This declining population growth rate is a part of population ageing, and it means that the labour force will also be growing more slowly in a parallel fashion. That, in turn, means that GDP will be growing correspondingly more slowly, that is 0.5% per year more slowly than it would otherwise have grown by 2040," Dr Lee explained. 

"This is relative to the trend in productivity which will most likely make the GDP growth rate continue to be quite positive, but a bit slower than it would otherwise have been," he added. 

The global ageing population and population drops in developed countries may also come in handy for Bangladesh. 

For example, China's population declined by 850,000 to 1.41 billion in 2022. And even before that, China's working-age population had been declining for years and projections show 25% of the population will be 60 years or above by 2030.

According to population scientist Dr Islam, Bangladesh stands to gain from China's shrinking population, foreseeing a shift from labour-intensive industries to capital-intensive ones in the latter. He envisions an opportunity for Bangladesh as low-skilled, labour-intensive industries might relocate to the country, and investments from other nations could potentially divert to Bangladesh instead of China.

That said, even though the recent surge in births might seem like a blessing for Bangladesh, Dr Islam stressed that the initiatives to bring down the fertility rate should be continued. 

He asserted that Bangladesh differs from China or Japan, where ample employment opportunities still exist. Instead, in Bangladesh, 2.2 million young individuals enter the job market annually, with a substantial number struggling to attain their preferred positions.

"Besides, Bangladesh is already a very densely populated country, with the quality of life not up to the mark at all. In this situation, we cannot let the population grow rapidly," he said. 

He also mentioned that TFR is not equal or has not decreased uniformly in all areas of Bangladesh. TFR is higher in Sylhet, Chattogram and Mymensingh divisions, while it is also higher among the underprivileged demography, with early marriage and teenage pregnancy having risen sharply among the non-slum urban population during the Covid-19 pandemic.

Meanwhile, Dr David Bloom, a Harvard Professor of Economics and Demography, highlighted the current dependence of older individuals in Bangladesh on family support for their well-being. 

However, this support may be strained in the future due to a declining working-age population and the migration of earning family members away from their elders.

Hence, "Bangladesh needs a formal elder care system, emphasising non-familial components like long-term care and community-based services. This transformation requires significant investments in infrastructure, human resources, and supportive legal frameworks," stated Dr Bloom.

Dr Islam also underscored the importance of formulating a new population policy geared towards making the ageing population prepared for the future. 

"We need to restructure the country's healthcare system to adequately support the ageing population and facilitate a healthy ageing process. Additionally, measures should be implemented to enable the elderly to adapt to new technologies and access enhanced social security coverage," he said, besides proposing an increase in the retirement age as part of these efforts.

In this regard, Bangladesh can draw inspiration from Japan's effective lifelong learning programs, fostering continuous skill development in older individuals through collaborations with educational institutions and industry experts. To boost workforce dynamism, Bangladesh can also adopt flexible work arrangements, such as part-time and remote options, and provide incentives like tax benefits and subsidies.

"Bangladesh can learn from Japan's experience in managing an ageing population, while China's experience could offer insights into the consequences of population control policies and gender imbalances," said Poonam Muttreja, Executive Director of Population Foundation of India.

As reflected in the research paper by Dr Cylus, although an increase in the 55-69-year-old share of the total population is associated with a reduction in real per capita GDP growth, the decline in economic growth is moderate if the population at that age is in good health. 

"While ageing populations have been shown to correlate with slower economic growth by some researchers, our work has found that if older people are in good health, any adverse effects of ageing for the economy can be moderated or indeed entirely eliminated. The key is that Bangladesh should make good use of these next two decades," Cylus said. 

The same belief is echoed in a study titled 'The relation between an ageing population and economic growth in Bangladesh: Evidence from an endogenous growth model' as well. 

The study suggests that contrary to the common belief that an ageing population hinders economic growth, an ageing population may actually contribute positively to economic growth in low-income countries like Bangladesh, with the relationship between the ageing population and per capita GDP growth in Bangladesh statistically significant at a 5% level.

But to make sure this continues to happen, "it is essential for Bangladesh to prioritise policies that support the country's growing older populations, including healthcare, social welfare and financial planning for retirement. Failure to do so could lead to significant economic and social challenges in the future," Dr Selim Raihan, the executive director of the South Asian Network on Economic Modeling (Sanem), told TBS in a previous report.