Why can the actual dependency burden in a country be higher than what is indicated by the age-based dependency ratio?
Answer & explanation
Correct answer: option 2
The correct answer is Option 2: Because some people within the working-age group may be unemployed or underemployed
The age-based dependency ratio assumes that everyone in the working-age group is economically productive. In reality, many people within this age group may be unemployed or underemployed. Such individuals are not contributing fully to production and may depend on others for support. Therefore, the actual dependency burden can be higher than what the age-based dependency ratio suggests.
NCERT: "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."