Forecasts and insights on India’s demographics using lee-carter mortality model

Abstract

Much has been made in the newspapers about India’s being on the edge of a booming era of economic growth. Such growth would unquestionably be driven by the structure of the population that shall develop in the country over the years. The demographic dividend, as it is termed, is seen to be favorable to India and is projected to be skewed towards the youth, thus enabling a rise in the workforce. The authors of this paper have attempted to predict this demographic dividend for several assumptions of the birth rates. Subsequently, they have utilized the Lee-Carter model in order to predict the mortality rates prevalent. The Lee-Carter model is a powerful tool that has already been used in academia for predicting the death rates. We use the model for India, and subsequently forecast the mortality rates using the data available. The rates so derived are then used with the current census population figures to predict the demographic dividend.