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If sustained low birth rates make successive cohorts smaller, what future labour-market challenge may emerge?

Answer and explanation

Correct answer: Fewer entrants into the working-age population

Persistently small birth cohorts eventually become small working-age cohorts. If more people retire than enter the labour force, labour supply may slow or decline. This can produce worker shortages in some sectors, wage pressure, and rising old-age dependency. Youth dependency may actually fall in such a situation rather than rise. The economic effect of low fertility is delayed: it becomes visible as smaller cohorts age into the labour market while older cohorts move into retirement. Thus, option A follows from cohort replacement over time.

Related tags

Low FertilityShrinking WorkforceCohort SizeLabour SupplyAge StructurePopulation CompositionGeographyClass 12 Mcq

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