Theory question 104
PopulationSection B: answer three questions only from this section.
Define ageing population and explain its effects on an economy.
Show the model answer
Model answer
An ageing population is one in which the proportion of old people (usually 60/65 years and above) is increasing
Effects: high dependency ratio, as a smaller working population supports more old people
Government spends more on pensions, health care and old people's homes
The labour force becomes less mobile geographically and occupationally
Shortage of young workers and less innovation
Pattern of consumption shifts towards goods and services for the elderly
Lower savings and investment, possibly slower growth
Higher taxes on workers to support the elderly
Explanation
Define clearly, then explain at least four effects.