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A country's total population is stable but the population aged over 65 is rising while the working-age population is shrinking. What may be the most important economic effect?

Answer and explanation

Correct answer: Pressure on labor force and tax base with higher pension and health demand

A stable total population can hide major changes in age structure. If the number and share of people over 65 rise while the working-age population shrinks, fewer workers may be available to produce goods and services and to pay taxes. At the same time, more people may need pensions, health care, and long-term support. The resulting dependency pressure can affect public budgets and economic growth.

Therefore option A is the most important likely effect. Stable total population does not make age structure irrelevant; the distribution by age strongly influences labor supply and public spending. School demand would not necessarily double because the older group is increasing. Economic problems will not all disappear, and the described changes do not automatically mean every economic indicator worsens, but pressure on labor, taxes, pensions, and health services is a logical concern.

Related tags

Population AgeingWorking Age DeclinePension DemandLabor ForcePopulation GrowthThe World Population – DistributionDensity And GrowthThe World Population Distribution Density And Growth

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