What could be the possible result of 'Demographic Dividend'?

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → An increase in the proportion of workers relative to non-workers in the population.

Option (1) An increase in the proportion of non-workers relative to workers in the population. — Incorrect. This is the reverse. More dependents for each worker means a rising dependency ratio, a cause for worry in an ageing population, not a dividend.

Option (2) Higher the ‘dependency ratio’, higher the dividend. — Incorrect. It is a falling dependency ratio that can bring growth and prosperity. A higher ratio means a smaller share of working people carrying a larger share of dependents.

Option (3) An increase in the proportion of workers relative to non-workers in the population. — Correct. The ‘demographic dividend’ results from an increase in the proportion of workers relative to non-workers. As the demographic transition lowers the dependency ratio, a larger working-age group (15 to 64 years) supports fewer children and old people, creating the potential for growth.

Option (4) Higher employment opportunity for people. — Incorrect. Employment is a condition for the dividend, not its result. The potential turns into actual growth only if the rise in the working-age group is matched by more education and employment; if the new workers stay unemployed, they become dependents rather than earners.

NCERT (2025-26): “Common Concepts and Indicators …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.”

“Does the changing age structure offer a ‘demographic dividend’ for India? … The ‘demographic dividend’ results from an increase in the proportion of workers relative to non-workers in the population. In terms of age, the working population is roughly that between 15 to 64 years of age. This working age group must support itself as well as those outside this age group (i.e., children and elderly people) who are unable to work and are therefore dependents. Changes in the age structure due to the demographic transition lower the ‘dependency ratio’, or the ratio of non-working age to working-age population, thus creating the potential for generating growth. But this potential can be converted into actual growth only if the rise in the working age group is accompanied by increasing levels of education and employment. If the new entrants to the labour force are not educated then their productivity remains low. If they remain unemployed, then they are unable to earn at all and become dependents rather than earners.…”