How does the demographic dividend help a country in terms of growth and prosperity?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Provides a large working population of workers
Option (2) Provides a large working population of workers — Correct. The dependency ratio compares the dependents with the people of working age (15 to 64 years). When it falls, there is a larger proportion of workers relative to non-workers, and this can be a source of economic growth and prosperity. This benefit flowing from the changing age structure is the ‘demographic dividend’. It is temporary, since the large pool of workers will one day turn into non-working old people.
NCERT (2025-26): “2.1 Some Theories and Concepts in Demography … 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.” “…The real problem is in defining the dependency ratio as the ratio of the non-working age to working-age population, rather than the ratio of non-workers to workers. The difference between the two is determined by the extent of unemployment and underemployment, which keep a part of the labour force out of productive work.…” |