Effects of a declining Population

  • It changes the distribution of wealth in favour of the older people at the expense of the young ones leading to income inequality.
  • It leads to a fail in aggregate demand resulting into a smaller market. This affects investments in the economy.
  • It increases the dependence burden because the provision of social services will fall more heavily on the working population.
  • It may lead to less expenditure on social infrastructure like schools; hospitals etc. This strengthens the government's ability to provide facilities.
  • It reduces pressure on land and other factors of production.
  • It helps a country to attain the optimum level of population in case there had been an over population.
  • It strengthens the governments' ability to provide essential goods and services.
  • It reduces the problem of unemployment since labour supply drops.
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