In 2023, India officially overtook China to become the most populous country in the world—a landmark demographic milestone that is expected to persist throughout the remainder of the 21st century. This shift has sparked renewed debate about whether India might not only surpass China in population but also terms of socio-economic influence and global economic clout. A recent study conducted by researchers at the International Institute for Applied Systems Analysis (IIASA) offers a nuanced perspective on this question, exploring whether India’s demographic momentum can be translated into genuine economic power in the coming decades.

While sheer population size often captures the headlines, the researchers argue that a more meaningful measure lies in the concept of productivity-weighted labour force (PWLF). This metric accounts not merely for the number of working-age individuals but for the qualitative dimensions of human capital—particularly educational attainment and the overall quality of education. By focusing on these deeper indicators, the study challenges the conventional view that equates demographic youthfulness with economic superiority. Instead of relying on age structure or headcount alone, the PWLF framework offers a more refined lens for understanding labour force potential and future economic trajectories.

The study, published in Population Research and Policy Review, concludes that China is likely to retain a substantial economic lead for much of the next fifty years. This advantage is rooted not in the number of its workers but in their higher levels of education and greater workforce participation. Even as China’s population begins to shrink and age more rapidly, its educated workforce—shaped by decades of investment in schooling and infrastructure—continues to yield dividends. The results complicate popular narratives that depict China’s demographic decline as imminent and inevitable, as well as India’s demographic ascent as unambiguously beneficial.

One of the key messages from the study is that demographics alone do not determine an economy’s destiny. As IIASA researcher and co-author Guillaume Marois aptly puts it, “It’s not about how many people you have; it’s about what they can do.” His observation cuts to the heart of the issue: without commensurate investments in human capital, even a large and youthful population may fail to translate into economic strength. Policies aimed solely at increasing fertility rates—such as incentives for larger families—are insufficient and potentially misguided if they are not accompanied by strategies to expand opportunities and capacity for all citizens.

India, in particular, stands at a crossroads. Its vast and growing youth population does hold potential for a demographic dividend, but only if structural barriers are addressed with urgency. The study highlights the importance of sustained and inclusive investment in education, particularly for girls and young women, alongside initiatives to address the country’s persistently low female labour force participation. Without substantial progress on these fronts, the sheer size of India’s population may become more of a burden than a blessing, stifling its aspirations for economic parity with China.

On the other hand, China faces the challenge of maintaining economic dynamism amid a rapidly ageing population. The study suggests several strategies the country could adopt to mitigate the impact of demographic decline, including raising the retirement age, increasing reliance on automation, and enhancing workforce productivity. In essence, while India’s challenge is to harness its demographic momentum through inclusive development, China’s task is to preserve its existing economic strength through adaptation and resilience.

Ultimately, the study reinforces a broader global truth: that the future of economic growth will be shaped less by raw numbers and more by the cultivation of human potential. For both India and China—and indeed for all nations—the strategic priority must be to foster education, promote gender equality, ensure social protections, and build inclusive, productive labour markets. As Marois concludes, “The demographic race between giants will be determined more by human capital development than total population size.” It is a powerful reminder that in the twenty-first century, the engine of prosperity will not be demography alone but the dignity, capacity, and agency of people.

More information: Guillaume Marois et al, The Demographic Race between India and China, Population Research and Policy Review. DOI: 10.1007/s11113-025-09966-y

Journal information: Population Research and Policy Review Provided by International Institute for Applied Systems Analysis