Demographic Dividend and Female Labourforce participation in India

India’s demographic dividend has attracted increasing attention in recent years. Although there has been general consensus on the demographic opportunity, the ability of the country to take advantages of demographic opportunity are often debated. The suspicion was mainly on account of the ability of the economy to absorb productively the unskilled and semi educated labourforce. At the same time, the available empirical evidences present positive effect of demographic changes on the economy. Thus there appears to be a contradiction on the estimates and general writings on the demographic-economic interaction in the country. One of the important pathways through which demographic dividend occurs is through increasing female labourforce participation. But female labourforce participation of those states with rapid demographic changes are relatively low in the country. Therefore, there are large concerns on the contribution of female labourforce participation for the economic growth in the country. But most of these are narratives and are not based on scientific estimation. This study makes an attempt to quantify the effect of female labourforce participation on economic changes using both panel data (using 2SLS estimates) as well as micro data (considering number of children and its impact on labourforce participation).