Why is Demographic Dividend considered temporary?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Larger pool of working age people will gradually turn into non-working old age group
Option (1) Larger pool of working age people will gradually turn into non-working old age group — Correct. A falling dependency ratio, with more workers for each non-worker, is a source of growth and prosperity; this benefit from the changing age structure is the demographic dividend. It is temporary because the larger pool of working age people will eventually turn into non-working old people, and the dependency ratio will rise again.
NCERT (2025-26): “2.1 Some Theories and Concepts in Demography … 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.” |