Outline any five effects of high dependency ratio [20 marks]

Answer Details

The dependency ratio is the ratio of the dependent population (those below the working age, usually under 15, and those above it, usually over 64) to the working population (aged 15 to 64). A high dependency ratio means each worker supports many non-workers. Its effects include:

1. Low savings and investment: most income is spent on maintaining dependants, leaving little to save, so funds available for investment and growth are reduced.
2. Low standard of living: a worker's income is shared among many dependants, so income per head is small and living standards fall.
3. Heavy burden on the working population: workers bear high responsibility for feeding, clothing, housing, educating and caring for dependants, which can lower their morale and welfare.
4. Pressure on social services: demand for schools, hospitals, housing and other amenities rises faster than they can be provided, leading to congestion and poor services.
5. Increased government expenditure on welfare: government must spend more on education, health and social security for dependants, straining public finances.
6. Reduced capital formation and slow economic growth: because savings and investment are low, the economy grows slowly. (Also acceptable: encourages child labour and can worsen unemployment.)

Any five, well explained, complete the answer.