Ageing population and migrant flows: South India confronts a demographic test

When Andhra Pradesh Chief Minister N Chandrababu Naidu recently announced plans to draft legislation incentivising families to have more children, it may have sounded like a political novelty. In reality, it was a signal flare — a public acknowledgment of a quiet demographic challenge emerging across India’s more prosperous southern states.

Decades of investment in female literacy, women’s empowerment and family planning enabled Kerala, Tamil Nadu, Karnataka, Andhra Pradesh and Telangana to reach replacement-level fertility of 2.1 children per woman well ahead of the rest of the country. 

Kerala achieved this milestone as early as 1988, when India’s national total fertility rate (TFR) stood at 4. Tamil Nadu followed in 1993, with Andhra Pradesh and Karnataka reaching replacement-level fertility later, in 2001 and 2005, respectively.

Now, that hard-won demographic success is becoming a source of deep economic anxiety — not just over births, but over labour supply, growth, public finances and a region increasingly reliant on the northern states it once outpaced.

Fresh data from the Sample Registration System (SRS) 2021 underscores the scale of the shift. All five southern states now report total fertility rates between 1.5 and 1.6 children per woman, steeper declines than recent projections anticipated. 

At this level, each generation is roughly 25% smaller than the last, raising the prospect of shrinking communities, tightening labour markets and growing strain on public finances over time.

The contrast with northern India is stark. Bihar leads with a TFR of 3.0, followed by Uttar Pradesh at 2.7 and Madhya Pradesh at 2.6, nearly double the South’s levels. Bihar’s crude birth rate stands at 25.6 per 1,000 people, compared with 12.9 in Kerala.

These are not marginal differences; they point to ‘two Indias’ moving in opposite demographic directions, and potentially on a collision course.

A projection report by the International Institute of Migration and Development and the Population Foundation of India confirms what demographers have long warned: southern states are likely to begin losing population in absolute terms after 2041.

Research published in Nature estimates that India’s demographic dividend added 1.9 percentage points annually to the gross domestic product between 1981 and 2021. If the country’s most economically productive states begin to run out of working-age people, those gains could go into reverse.

Reflecting on the TFR trend, S Irudaya Rajan, one of India’s foremost demographers, sees it as the inevitable outcome of decades of political commitment to fertility control. He points to a campaign in Kerala during the 1970s, when a government sterilisation drive was framed almost as a public festival.

“Within a day or two, they sterilised 70,000 women. The entire government machinery was committed to reducing fertility,” he told DH. “Now they are asking people to increase fertility. When the government incentivised smaller families, people embraced the idea. But incentives to have more children may not work the same way. The current generation is likely to follow patterns set by their parents. The next generation may think differently, but that could take 30 to 40 years,” he adds.

Rajan’s prescription is structural, not transactional. “Policy intervention matters, not incentives. What is needed are concrete guarantees that women can re-enter the workforce after having children, not just gestures,” he adds.

International evidence supports his position. A November 2025 RAND Corporation assessment of China’s pronatalist programme concluded that it had failed to reverse the fertility decline. 

For Rajan, the fundamental calculus of parenthood has been inverted. “Earlier, children were considered assets. Now they are like liabilities,” he adds.

The shift in perception is visible across life stages: births once supported by extended families now come with high private hospital costs, while informal childcare has eroded as nuclear families move to urban areas. Women face an added challenge, as career breaks for child-rearing often leave them with limited paths back to work.

The result is a fertility floor that shows no sign of rising. The norm has become self-reinforcing, a “social diffusion,” as Rajan puts it, that spreads through communities much like knowledge.

The remittance economy

Nowhere is the demographic change more consequential than in the migration and remittance economy that has long sustained the south. Kerala, Karnataka, Tamil Nadu and Andhra Pradesh have for decades sent skilled and semi-skilled labour to the Gulf and beyond. Between 2017 and 2024, Kerala’s share of national remittances edged up from 19% to 19.7%; Tamil Nadu’s share rose from 8% to 10.4%. NRI deposits in Kerala’s banks now total around Rs 3 lakh crore. For now, the flows remain robust. 

Rajan, who has conducted the Kerala Migration Survey for 25 years, argues that the channel has upgraded rather than contracted. “80% of Kerala workers in the Gulf used to be unskilled. Earlier you had 10 people in Dubai each sending $100. Now you have three people earning $400 each. Fewer people, more money,” he adds. 

The shift is evident in Gulf migration patterns. Data from the e-Migrate portal and a Rajya Sabha question on emigration clearances issued to blue-collar workers tell a revealing story. Outflows from traditional southern source states like Kerala have fallen, partly because rising local skill levels and higher domestic wages reduce the incentive to take low-wage jobs abroad. Meanwhile, Uttar Pradesh and Bihar have become the dominant sources of low- and semi-skilled workers for the Gulf’s construction, hospitality, and services sectors.

Benoy Peter, Executive Director of the Centre for Migration and Inclusive Development in Kerala, notes a similar upgrade on the ground. “Overseas migrants from Kerala are increasingly seeking skilled jobs, thanks to easier access to education,” he says. He cites a young man from Kollam who left for the UAE with basic schooling, learned a trade in a glass factory, and now runs his own business. “Many migrants follow this path, starting as workers and becoming employers. Remittances to Kerala are still rising, but as more Malayalis move to Europe, Canada, and Australia, mostly as students, they may settle there, potentially reducing future remittances,” he adds.

Gulf-bound migrants, even those who became employers, generally maintained strong financial and emotional ties to Kerala. The new wave of student migrants to Europe, Canada and Australia is different. Rajan notes, “When people move from Gulf countries to non-Gulf countries, you may lose them permanently.” Peter adds that this trend could eventually create a significant shortage of workers, even for skilled jobs, in Kerala.

North Indians fill the gap

On the other hand, declining birth rates in the southern states are steadily reshaping the region’s labour landscape. Migrants from Bihar, Uttar Pradesh, Jharkhand, Odisha, West Bengal and Madhya Pradesh work in construction sites, factories, fishing docks and domestic kitchens across Kerala, Tamil Nadu and Karnataka. 

In 2025, the School of Social Sciences at the National Institute of Advanced Studies, Bengaluru, surveyed 600 migrant workers living in informal settlements in the city. Of these, 249 were inter-state migrants, and around 85% of them came from six states: Bihar, Jharkhand, Madhya Pradesh, Odisha, Uttar Pradesh and West Bengal.

Retna Kumar, senior research fellow at the Population Foundation of India, says that the rising internal migration from the north to the south is a direct result of low fertility rates in the southern states. “Labour shortages are the most immediate impact and will only worsen in the future,” he adds.

Another major consequence is the shrinking youth population and the rise of an ageing demographic. For instance, Retna Kumar notes that in Kerala’s Pathanamthitta district, which has the lowest fertility rate in India, the population is increasingly elderly. School closures due to declining student numbers, along with the contraction of businesses catering to young consumers, are among the visible effects of low fertility. The district offers, in miniature, a glimpse of the future that the rest of southern India may be heading toward.

Political conversation

Such in-migration from the north is stirring an uncomfortable political conversation. Rajan draws a sharp analogy: “You have Little India in Singapore. What is wrong with having Little West Bengal in Kerala? You also have Little Kerala in Delhi. Migrants will always be present — they have resilience.” 

Labour migration from northern to southern states is becoming a prominent feature of regional demographic and economic patterns. Historical instances of nativist rhetoric in states such as Maharashtra and Assam indicate the potential for cultural tensions to influence policy and public discourse. How southern state governments manage the balance between labour demand and social integration will be an important factor in shaping domestic policy frameworks over the next decade.

“Initially, migrants were mostly in construction and factories; now they even dominate traditional sectors like fishing,” Peter says. “In this scenario, Kerala rarely sees disputes between locals and migrant workers, as the real issue is an acute shortage of local labour for demanding jobs,” he adds. In this view, the north is not competing with the south; it is keeping it functioning.

“The danger,” Peter says, “is not economic displacement but social friction.” He cites a lynching incident in Palakkad district in December 2025, in which 31-year-old Ram Narayan Baghel, a native of Chhattisgarh, was killed by a mob that mistook him for a thief. While an isolated incident, it serves as a chilling reminder that integrating lakhs of northern workers into southern communities is as much a social challenge as an economic one, and a challenge that has only just begun.

Straining finances

The demographic reality of low fertility inevitably leads to an older population. With fewer young people entering the workforce, the dependency ratio rises — each working-age adult must support more elderly citizens. For southern states, which have built generous welfare systems, this is not an abstract concern but a slow-moving fiscal reckoning.

Rajan calculates that 20% of voters in Tamil Nadu and Kerala are already elderly — a constituency large enough to influence elections, yet one that governments still often view as a welfare burden rather than an economic asset. He proposes a new perspective of the “silver dividend”, an idea that an engaged, empowered elderly population can contribute productively to growth instead of draining it.

He draws a careful distinction between age groups that policymakers often lump together. The “young-old” (60–70) are largely independent; the “old-old” (70–80) need modest support; and only the “oldest-old” (80 and above) require intensive care. Treating all elderly as dependent, he argues, is both economically wasteful and empirically inaccurate.

“If you empower and engage the elderly, you can achieve high growth without waiting for 2047 — the year often cited as the point when India’s demographic dividend will peak. You don’t need to wait for young people; mobilise the resources you already have. Most of the elderly are women, and bringing them into the workforce represents your gender dividend,” he says.

Southern India’s governments are beginning to confront the demographic shifts expected over the next two decades. With a shrinking youth population and a growing elderly cohort, labour and social policies will need to adapt. Key areas include facilitating workforce participation among women, leveraging the potential of older workers, integrating migrant labour effectively, and recalibrating public spending to reflect changing population dynamics. How policymakers address these challenges will shape the region’s economic and social resilience in the coming decades.

(With inputs from Arjun Raghunath in Thiruvananthapuram)