Bangladesh’s youth dividend dilemma

Dr. Nasim Ahmed :

Bangladesh is at a crucial demographic turning point. Nearly one-third of its population is aged 15 to 29, a situation economists call a “youth dividend,” a period when a large working-age population can boost economic growth, innovation, and social change.

However, this benefit can quickly turn into a burden if enough jobs, skills, and opportunities are not available.

The key question for policymakers is clear: will Bangladesh successfully leverage its youth dividend, or is it facing a ticking socio-economic time bomb?

Over the past two decades, Bangladesh has made notable progress in poverty reduction, GDP growth, and improvements in key social indicators.

However, the economy’s capacity to absorb a rapidly expanding youth labor force has not kept pace.

Each year, more than two million young people enter the job market, placing increasing pressure on an already constrained employment system.

This widening gap between labor supply and available jobs lies at the heart of the country’s youth challenge.

At first glance, Bangladesh’s youth profile appears promising.

Today’s young generation is more educated, digitally connected, and ambitious than any before it.

Female labor force participation has risen, internet access has expanded, and many young people aspire to careers beyond traditional agriculture.

Overseas employment continues to serve as an important outlet, with remittances from young migrant workers supporting household incomes and macroeconomic stability.

These trends suggest that youth could become powerful drivers of productivity, entrepreneurship, and global integration.

Beneath this optimism, however, lies a more troubling reality.

Youth unemployment and underemployment remain persistently high, particularly among educated graduates.

Academic degrees often fail to translate into decent employment, leading to frustration, wasted human potential, and declining returns on education.

The labor market is dominated by informality, low wages, and limited job security, offering few pathways for upward mobility.

As a result, many young people are trapped in a cycle of credential inflation, accumulating qualifications without acquiring market-relevant skills.

The skills-jobs mismatch is one of the most significant barriers to realizing Bangladesh’s youth dividend.

The education system remains heavily theory-oriented, exam-centered, and weakly aligned with labor market demands.

Technical and vocational education and training face persistent challenges, including outdated curricula, low social prestige, and limited private-sector engagement.

Employers frequently report difficulties in finding job-ready graduates, while young job seekers complain that available jobs do not match their qualifications or aspirations.

This disconnect undermines productivity and erodes trust in education and employment institutions.

Governance challenges further intensify youth frustration. Recruitment processes in both public and private sectors are often perceived as opaque, politicized, or influenced by informal networks.

Whether entirely accurate or not, these perceptions generate a sense of exclusion among young people who believe that merit alone is insufficient to secure opportunity.

When high aspirations collide with blocked mobility, the outcome is not merely economic inefficiency but rising social discontent and institutional distrust.
Migration functions both as a coping mechanism and a warning signal.

Overseas employment absorbs a significant share of the youth workforce and generates vital remittances.

However, high migration costs, skill downgrading abroad, and exposure to exploitation reveal systemic shortcomings at home.

When educated youth view migration as the primary route to dignity and income, it reflects deep anxieties about domestic opportunity structures. No country can sustainably rely on exporting its youth potential.

If mismanaged, the consequences of a frustrated youth cohort can be severe.

International experience shows that large populations of unemployed or underemployed youth are more vulnerable to social unrest, political radicalization, crime, and mental health challenges.

Although Bangladesh has so far avoided major youth-led instability, warning signs are visible in rising anxiety, declining trust in institutions, and widespread uncertainty about the future.

The demographic dividend is time-bound; once the window closes, the costs of inaction become increasingly difficult to reverse.

Yet it would be misleading to portray Bangladesh’s youth dividend as already lost. The same demographic forces that pose risks also present exceptional opportunities.

With appropriate policy choices, youth energy can be redirected toward inclusive and sustainable growth.

Education reform must move beyond enrollment and credentials toward quality, relevance, and adaptability, emphasizing problem-solving, digital literacy, and soft skills.

Job creation must become a central macroeconomic objective through support for small and medium enterprises, diversified manufacturing, and youth entrepreneurship. Governance reforms that ensure transparency, fairness, and accountability are equally essential.

Bangladesh’s youth population is neither inherently a dividend nor inevitably a time bomb. It is a high-stakes variable whose outcome depends on choices made today. Demography offers potential, not guarantees.

If Bangladesh invests wisely in skills, jobs, and governance, its youth can become architects of a more prosperous and resilient nation. If it fails, the costs will be borne by society as a whole.

(The author holds a PhD in Public Policy from Ulster University in the UK and works as Associate Professor of Public Policy at the Bangladesh Institute of Governance and Management, affiliated with the University of Dhaka. Email: [email protected])