01 If child dependency declines because of lower fertility but the government also cuts education investment, what effect may occur on the demographic dividend?
Answer and explanation
Correct answer: A. The potential dividend may weaken because the future workforce may be less skilled
Explanation: A fall in fertility can reduce the child-dependency ratio, creating a favorable age structure for a demographic dividend. However, the dividend depends on more than the number of potential workers. Workers also need education, training, health, and relevant skills so that they can obtain productive employment. If government education investment is cut, future workers may be less skilled and their productivity and earnings may be lower.
Therefore option A is correct: the potential dividend may weaken even though child dependency has declined. The favorable age structure creates an opportunity, but poor human-capital preparation may prevent society from using it fully. The dividend must not automatically increase, and education clearly has a strong connection with workforce quality. Lower education investment does not immediately make child dependency rise; that ratio is mainly affected by age distribution and fertility. The result is thus a missed or reduced opportunity, not a guaranteed outcome.