Effects of an Ageing Population on the Economy
- It leads to a small size of labour force.
- Leads to greater dependence on the young because the young are the ones who support the old. The burden of developing the economy tends to fall heavily on the young ones.
- Leads to changes in the patterns of consumption and production of goods for the old people.
- It decreases the labour mobility. An ageing population is less mobile compared to the one dominated by the young ones. Young people are more mobile than the old ones.
- Leads to structural unemployment. This is because the demand for the products of those industries engaged in the production for the young falls consequently, some categories of workers may be laid off.
- There will be shortage of labour to new industries. The economy becomes unable to supply the required labour to both the new and expanding industries.
- An ageing population tends to be more conservative and 'less innovative which retards economic development.