Demographic dividend which gives South Asia an edge over the other geographies in the region is gradually approaching a turning point as its working age population is slowing down and the region is expected to age faster, according to a new report by the World Bank.
The 204-page “Demographic Change in South Asia From Tailwinds to Headwinds for Development” report released on 3 November 2026 reveals that slowing growth in its working-age population threatens to erode a key driver of economic growth, with the region expected to age faster and at lower income levels than other emerging economies.
The report states that in most South Asian countries, demographic tailwinds are about to fade, and the shift from an ageing to an aged population will take 25 years—compared with 32 years in other emerging market and developing economies (EMDEs) and 46 years in advanced economies.
South Asia has an opportunity to capitalise on a working-age population that numbers 1.17bn people, but this window is gradually closing. In less than a decade, South Asia’s working-age population will peak and start shrinking. By 2049, it will be an aged regional economy with 14% of its population aged 65 and older.
World Bank Vice President for South Asia Johannes Zutt said, “South Asian economies are ageing faster and earlier in their development journeys. They need to act now to adopt policies and build infrastructure that create more and better jobs and deepen the gains from their ‘youth dividend’, while at the same time preparing for ageing. This will enable South Asia to make the most of its large working age population and lay the foundations for a ‘second dividend’ as healthier older people continue contributing to the economy.”
The report says the challenge is compounded by a jobs gap. Only 60% of South Asia’s working age population is employed, and 88% of employed workers work informally, with lower earnings and less job security. Without healthier and more skilled workers, robust social protections, and more and better-paying jobs, the region risks missing the opportunity to turn its large working-age population into sustained economic gains.
At the same time, health care, long-term care, and pension systems remain ill-equipped to meet the needs of a population that is living longer but not necessarily healthier. Only 17% of South Asia’s working age population contribute to a pension scheme, and only 10% of older South Asians receive any pension benefits, the lowest coverage globally.
The report offers a roadmap for South Asian countries to act on both fronts. They can sustain the “youth dividend” by creating more productive jobs, expanding access to finance for MSMEs, streamlining regulations, improving health, education and skills, and removing barriers to women’s employment. They can also unlock the “second dividend” through stronger healthcare, long-term care and pension systems that support people as they age, alongside greater savings and investments that raise productivity.