The primary demographic and economic challenge posed by an ageing population is the shift in the balance between the working-age population and the non-working-age population, which is measured by the dependency ratio.
Dependency Ratio: This ratio measures the number of dependents (people generally under 15 and over 64) for every 100 people in the working-age population (typically 15–64 years).
Impact of Ageing: As the proportion of older people (aged 60 or 65 and above) increases significantly, the elderly dependency ratio rises. This means a smaller working-age group has to support a larger number of older dependents, leading to increased strain on:
Public finances: More spending is needed for pensions, social security, and especially healthcare for the elderly.
Labour productivity: A shrinking workforce may lead to labour shortages and slower economic growth.
Family resources: The burden of care often falls on family members in the working-age group.
