Demographic change is coming to South Asia’s classrooms. Will education systems be ready?

South Asia is approaching a new demographic phase—one that will reshape education systems for decades. Today, it has the second-largest population of children under age 15 in the world, after Sub-Saharan Africa. But that is beginning to change. By 2050, the region’s under-15 population is projected to decline by about 16 percent, from 420 million in 2024 to 352 million. This demographic transition matters because it will directly affect how education systems plan, finance, and deliver services. Across the six countries in the region—Bangladesh, Bhutan, India, the Maldives, Nepal, and Sri Lanka—major progress has been made over the past two decades in expanding access to schooling even as the number of young people was rising. Almost all children across the region enroll in primary school at the right age, and participation in secondary education has also increased significantly. Yet access is only part of the story. The central challenge now is the quality of education. In countries such as Bangladesh and India, more than half of children at the end of primary school are in learning poverty, meaning they cannot read and understand a simple age-appropriate text. This is the core education policy problem facing the region: South Asia has made impressive progress in getting children into school, but far too many are still not learning enough once they are there. At the same time, these learning gaps persist in a context of limited public investment. On average, South Asian countries spend about 3.7 percent of GDP on education—below the 4 to 6 percent range often cited in international benchmarks. But the challenge is not only how much is spent. It is also how effectively resources are used. In many cases, spending remains concentrated in areas that do not always generate the strongest gains in student learning. That is where the region’s demographic transition opens a new opportunity to strengthen education policy—and to spend better, not just more. In countries with shrinking school-age populations, fewer students can create an opportunity to reallocate resources toward improving both coverage and quality. But this opportunity—linked to what is often referred to as a demographic dividend—is not automatic. Falling student numbers do not necessarily reduce costs, because education systems carry fixed expenses such as school buildings, administration, and transport networks do not shrink on their own. Without reforms, per-student costs will rise while learning outcomes remain weak. That is the central message: demographic change can create room to improve education, but only if governments actively manage the transition. A new World Bank Group paper analyses public education spending into key components—demographic change, enrollment, and spending per student—and projects how education spending as a share of GDP could evolve under different scenarios from 2020 to 2050. The findings suggest that, even without other reforms, demographic change and the declining number of young people alone could create meaningful fiscal space to reinvest in education. By 2050, that fiscal space at the regional level is estimated at about 0.53 percentage points of GDP for primary education (relative to 2020) and 0.47 percentage points for secondary education. Put simply, demographic change could free up resources that countries can reinvest to improve education quality—and reach the children who are still being left behind. Even after accounting for an ambitious expansion toward universal enrollment in pre-primary, primary, and secondary, the analysis suggests that demographic change could still leave meaningful fiscal space for reinvestment, with increasing per-student public education spending as a share of GDP per capita even up to current high-income country levels by 2050. This matters a lot for countries trying to turn access gains into learning gains—without putting additional pressure on public budgets. Still, the regional averages can be misleading. The fiscal space created by demographic change will not arrive everywhere at the same pace—or at the same scale. It will depend on where each country sits in its demographic transition, how many children are enrolled (and at which education levels), and per-student public education spending levels. Bhutan and the Maldives, for example, may be able to finance higher per-student spending (as a share of GDP), largely by capturing the gains from demographic change. In contrast, countries such as Bangladesh and Sri Lanka are likely to require additional resources to reach more ambitious quality targets. India stands out as a case where demographic change could create meaningful room for reinvestment in education. Nepal also shows potential, although outcomes will depend on how enrollment patterns and system efficiency evolve. Ultimately, the scale and impact of these opportunities will depend on policy choices across all countries. International experience offers an important cautionary lesson. Countries in Europe and Central Asia that faced declining student populations did not automatically realize savings. In many cases, the structure of school systems remained unchanged despite shrinking enrollment, driving inefficiencies, increasing inefficiencies public education spending, and reducing the ability to reinvest in quality education. For South Asia, the implication is clear: demographic change creates an opportunity—but only if governments act before inefficiencies become locked in. So what should governments do now? • First, protect education budgets and reinvest demographic savings. Governments need a shared strategy: demographic change should be used to improve learning. The goal is smarter spending—especially in areas with strong evidence of impact, such as improved pedagogy, structured teaching support, teaching to the right level, and interventions focused on student learning. • Second, plan the structure of the school system early. School consolidation can improve efficiency and quality, but it is politically and socially sensitive. Schools are community institutions, not just budget lines. Successful reforms require transparent communication, community engagement, and practical solutions such as safe student transport and improved facilities in receiving schools. • Third, tailor the response to country context. The region is moving through the demographic transition at different speeds. A one-size-fits-all approach will not work. What makes sense for Sri Lanka or the Maldives may differ from what is feasible in Nepal, Bhutan, Bangladesh, or India. This is also an opportunity for countries to learn from each other, seeing how others have responded who are at different stages of the transition. South Asia’s demographic transition creates a window of opportunity for policy action. If governments plan school systems now—and if they reinvest the gains back into education—fewer children in the system could become an opportunity to deliver better education quality for every child. That is the demographic dividend worth pursuing.