What is population aging and what consequences does it have for development?

What is population aging and what consequences does it have for development?

• A. A shrinking share of elderly.
• B. Increases youth dependency.
• C. Reduces healthcare costs.
• D. Growing share of elderly; increases pension and health costs, pressures on labor markets, potential shrinking workforce.

Answer: (D)

Population aging means a larger portion of the population becomes elderly because fertility has fallen and life expectancy has risen. This shifts the age structure so there are more older people relative to younger people, raising the old-age dependency ratio—the number of dependents who are elderly compared with the working-age population. This has clear development implications: as more people retire, pension and health-care costs tend to rise, putting strain on public finances and social insurance systems. With fewer people in the workforce or a shrinking growth of workers, there can be pressures on labor markets and potential slower economic growth unless policies adapt—such as raising retirement ages, boosting productivity, encouraging older workers to stay employed, or promoting immigration. In contrast, options that suggest a shrinking elderly share or rising youth dependency misstate the pattern, and claiming that healthcare costs decrease runs against the trend seen with aging populations. The described combination—growing elderly share along with higher pension and health costs and stress on labor markets—best captures how population aging affects development.

Population aging means a larger portion of the population becomes elderly because fertility has fallen and life expectancy has risen. This shifts the age structure so there are more older people relative to younger people, raising the old-age dependency ratio—the number of dependents who are elderly compared with the working-age population.

This has clear development implications: as more people retire, pension and health-care costs tend to rise, putting strain on public finances and social insurance systems. With fewer people in the workforce or a shrinking growth of workers, there can be pressures on labor markets and potential slower economic growth unless policies adapt—such as raising retirement ages, boosting productivity, encouraging older workers to stay employed, or promoting immigration.

In contrast, options that suggest a shrinking elderly share or rising youth dependency misstate the pattern, and claiming that healthcare costs decrease runs against the trend seen with aging populations. The described combination—growing elderly share along with higher pension and health costs and stress on labor markets—best captures how population aging affects development.