Given below are some statements. Read them carefully and choose the correct statement (s) from the given options.

Statement 1: A rising dependency ratio is a cause for worry in countries that are facing an ageing population.   

Statement 2: In case of rising dependency ratio can also be a can be a source of economic growth and prosperity in some cases.

Only Statement 1 is correct.

The correct answer is Option 1: Only Statement 1 is correct.

Statement 1: A rising dependency ratio is a cause for worry in countries that are facing an ageing population. Correct. As the proportion of elderly dependents increases, a relatively smaller working-age population must support a larger dependent population. This can create economic and social pressures, particularly in ageing societies.

Statement 2: In case of rising dependency ratio can also be a source of economic growth and prosperity in some cases. Incorrect. Economic growth and prosperity is associated with a falling dependency ratio, not a rising one. A falling dependency ratio means that the share of working-age people is relatively larger, creating the possibility of a demographic dividend.

NCERT: The dependency ratio is a measure comparing the portion of a population which is composed of dependents (i.e., elderly people who are too old to work, and children who are too young to work) with the portion that is in the working age group, generally defined as 15 to 64 years. The dependency ratio is equal to the population below 15 or above 64, divided by population in the 15-64 age group. This is usually expressed as a percentage. A rising dependency ratio is a cause for worry in countries that are facing an ageing population, since it becomes difficult for a relatively smaller proportion of working-age people to carry the burden of providing for a relatively larger proportion of dependents. On the other hand, a falling dependency ratio can be a source of economic growth and prosperity due to the larger proportion of workers relative to non-workers. This is sometimes refered to as the ‘demographic dividend’, or benefit flowing from the changing age structure. However, this benefit is temporary because the larger pool of working age people will eventually turn into non-working old people."