Introduction
Population plays
a vital role in the economy. As the population is increasing day by day,
the world concerns more about the problems that have been emerged and expected
to be developed. Although Sri Lanka is an outlier among the south Asian countries
in respect to socio-economic achievements as a developing country, Sri Lanka
should concern about the issues relates to the population growth, composition,
distribution and its impact on the economy. By analyzing the small population, it
is difficult to get a perfect understanding of the future trend of the economy.
So it is essential to have an in-depth analysis of the population pyramid, and
its impacts on the economy during recent decades. A population pyramid, which
consists of different age groups in the population, can be effectively used to analyzing
the economic impact during a specific period.
Analysis of population pyramid in Sri Lanka After 1977
Population pyramid
is the graphical illustration of the population which consist of different age groups.
These age groups can be basically divided into three categories; Child
population, working-age population, and elderly population. Three main demographic factors; fertility,
mortality, and migration affect the changes in the population pyramid during
recent decades. According to the first population census in 1981 conducted
after 1977, in the population pyramid, the majority of the population was closer to
the groundless on the top of the pyramid (Figure 01). But as time passed,
there is a pagoda-shaped structure after a few decades (Figure 01) in 2012.
According to the
1981 age-sex structure, the population of age group between 00-09 was
comparatively high in contrast with the other age groups as a result of higher
fertility rate (Table 01), decline in infant mortality rate (Table 02) and
expansion of health services. In 2012 there was a decrease in child population
but in insignificant amount. In 1981 the working-age population was relatively
low compared to 2012. In 2012 there is a higher proportion of the community in
the 30-34 age groups. The reason was the whole number of live births registered
in 1981 was over 420000, which were more significant than the size of the birth group of
adjoining years (W.I.D. Silva, 2015). There is a trend of demographic dividend
as the large proportion of the population included in the working age. This has a
positive impact on the economy if it is effectively utilized. There was an
upward trend in the elderly population in 2012 compared to 1981. Declining
fertility and mortality levels, development in emergency medical
assistance, improvement in nutrition and education are affected to increase in
aging population, and their life expectancy.
Population pyramid and its impact on the economy after
1977
·
Urbanization and
internal migration
At the national level,
rural-urban migration has both positive and negative impacts. They can improve
their income, better employment opportunities, and it improves the overall
efficiency of the economy. But another hand, there are some negative impacts such
as high population density, unemployment issues for natives, lack of
infrastructure and housing facilities, health care and sanitary issues, overcrowding, and environmental issues. Recent decade western province shows a high migration
related to other districts since 1977.
·
Employment &
Labour force participation
There is an upward
trend in the working-age population in Sri Lanka than in the past. In 1996 there were
8.64 million in the labor force and it increased 10.62 in 2006. According to
the higher amount of annual net labor force projections to the economy, to
supply job opportunities, the economic growth should be increased minimum of 6% to
7% and create job opportunities. Because of the increasing old population,
early worker retirement makes an adverse effect on Labour Force participation
Rate (Table 03). Female labor participation has been increased up to a
considerable amount. In 1971 the female labor force participation in Sri Lanka
was 26%, and it was increased to more than 33% in 2000, and in 2011 it was 36%
From the total labor force. The change in social impression towards women
employment, higher cost of living, higher education is the significant factors
influenced to the upward trend in women labor force participation. There is a
shift in sex ratio also. In 1981 the sex ratio was 104.0 was in 2012 it was
decreased up to 93.8. This trend shows a feminizing in the future. Although
the female population is higher than the male population in Sri Lanka, female labor force participation in the economic activities is less as a percentage
of total labor force participation. (Table 04)The technical and academic
advancement of the female should be increased to increase their competitiveness in
labor force participation. They should be given a chance to hold policy
development positions at a managerial level not only in the government sector but
also in private sector too.
·
Higher demand for International
migration
Working-age population
more concerns about seeking gainful employment, but lack of proper job
opportunities will be a dilemma for Sri Lanka. The government encourages
international migration as a solution to the skilled labor deployment.
According to the Central Bank 2013 annual report, recent international
migration per year is over 300000 and their remittances are about US$ 5619 million, and it becomes a significant income of government. From 1978 to 2012, there is a
continuous increase in worker remittances. This has a substantial impact on reducing
the unemployment rate and overall poverty in Sri Lanka. Well, the planned export of
human capital for employment should be taken place to increase foreign
exchange. As the increase in working-age population numerically, that created
a problem of absorption of educated manpower to the labor market. So their
demand for international migration has been increased in recent years. Proper
policies should be taken to shorten the brain drain and permanent movement of
valuable human capital such as highly educated research experts, managerial, and
specialists those who add value to the economy and labor force.
·
Aging population
& dependency ratio
Since the average
mortality level decreased, the overall life expectancy of the Sri Lankan population
has been increased (Table 05). As the age-sex structure of society has
dramatically changed from 1981 to the present, the elderly population was increased
from 6.6% to 12.4% (Table 06). The elderly need additional health care
facilities, and it affects the capital expenditure behavior of the country. The
proportion of the 00-15 year group is declining related to the past. So the
dependent population shows an increasing trend in Sri Lanka after 1977. In
1981, there were 18.7 elderly people for every 100 children. In 2001 this
amount had increased up to 35.2, and in 2012 it was 49.1 for every 100 children
(Table 07).In 1981 the total dependency ratio was 72 per every 100 persons in the
working-age population. During the demographic dividend period, it reduced up to
54 and in 2012 it was 60.2. Because of the higher burden, the high dependency
ratio hinders the economic development of the country. As the dependency rate
increases and less number of elderly employed in the economy (Table 03) The
government expenditure on health care and social security mechanism has to be
increased. Because of aged labor supply decreases, the family consumption
burden is increasing on working-age population, affects the saving rate of
the individual as well as family and the whole economy physical capital
formation. It is essential to consider since
the life expectancy has increased, and elderly with relatively higher education
will have the potential to actively and productively participate in the development
in the economy.
The window of opportunity/ first demographic dividend
Compared to 1981,
recently, the working-age population has increased quantitatively about
the other dependent age groups in the community; the capacity to save is high
in the period of demographic dividend. (Table 08) The most worthwhile part of
the population dividend would thrive by 2017, and it will disappear by
2031. If appropriate socio-economic policies are introduced immediately Sri
Lankan economy could be lifted to a higher position, thereby benefits could be
sustained for a more extended period. As the working-age population is more senior in
demographic dividend; more workers producing more total output if they are
productively employed, higher acquisition of wealth if savings occur and are
productively invested and a significant supply of human capital if appropriate
investments are made in its formation. The policymakers should get the maximum
use of this opportunity by preparing proper policies to attract foreign
direct investment to start industries, so sufficient employment opportunities
are created for youth and development will take place. Youth entrance to the
labor force is high in the demographic dividend period. Economic growth can be
increased by adding labor inputs to technical and academic education. The
technological education facilities in Sri Lanka should be developed to suit the
current market demand.
Conclusion
From 1977 to present there is an increasing
trend in population. But the people of the 0-4 age group is decreasing, and the
aged population is increasing. The government should make necessary adjustments
to allocate provision of facilities for old persons and create employment for
the expanding working-age population. It is in evadable to stop the aging
population and before coming to the higher dependency stage government can
expand their economic activities at their working age. Female employment has
been increased relatively in the past three decades. As the open economy policy was
introduced to the Sri Lanka labor incentive industries were started up. Although
Sri Lanka is a developing country, there are developments in the demographic
factors compare to other developing countries, since there is no adequate
economic growth it is unable to get the maximum benefits from favorable
population trends about employment. The government should implement
effective national policies which increase the maximum utilization of the
labor force, proper population structure, educational, and skill enhancement to
prevent the issues related to population in the future.
