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The demographic dynamics in India and China have major impacts on global economic development. Seeking to reassess the demographic race between the two countries with a focus on human capital and labor force quality instead of population size or age structure, researchers have looked at the productivity-weighted labor force (PWLF), which takes into account both the educational structure of the population and the quality of the educational system.

The findings of their study, in Population Research and Policy Review, suggest that China will likely maintain an economic lead for most of the next half-century due to its more educated and higher-participating labor force, despite India surpassing China in total population. These findings challenge the common narrative that rapid population aging in China and India's younger and larger population will automatically translate into economic dominance.

"It's not about how many people you have, it's about what they can do," explains IIASA researcher and study co-author Guillaume Marois. "Governments should focus less on the number of people—for example, by promoting policies that encourage women to have more children—but rather on ensuring everyone is given the opportunity to meet their own full potential and contribute to society."

The authors highlight that although India's continuing population growth and enormous youth population could eventually become an economic advantage, this can only be the case if the country makes substantial investments in education and reduces gender inequality in labor force participation. Research shows that if India's female labor force participation and education do not improve, in terms of PWLF, it may not catch up to China before the end of the century.

The results suggest that for India, policies to expand education, especially for women, and remove barriers to female workforce participation are critical if the country hopes to realize its demographic dividend. For China, maintaining high education quality and adapting to an aging workforce through automation, raising retirement ages, and boosting productivity will be key to sustaining economic strength.

"The demographic race between giants will be determined more by human capital development than total population size," concludes Marois. "Investing in health, education, income protection, poverty reduction, and promoting a productive, inclusive labor market providing decent employment are critical to future economic development in China, in India, and all over the globe."