I will explain the economic impacts of an ageing population on UK by give a detailed account and giving reasons. Currently, there are 10 million people in the UK over 65 years old and is predicted to nearly double to around 19 million by 2050.
There are many negative economic impacts of an ageing population. There is an increase in dependency ratio as more people will be claiming benefits such as sate pension, which are paid for by the working population through taxes, and less people working and paying for income taxes. There is also an increase government spending on health care and pensions and those in retirement tend to pay lower income taxes since they are not working and due to this, those in work may have to pay higher taxes. Also, there is a shortage of workers hence pushing up wages causing wage inflation. In 1900s, there were 22 people of working age for every pensioner but by 2024, there will be less than three. However, there are also positive economic impacts. Since there will be an increase in number of retired people, it will create bigger market for goods and services linked to older people and this will create more jobs for people so there will be less work shortage. Also, ageing population means that there will be a decline birth rate so there will be less young people, thus saving government money because young people require education money and pay no taxes.
Links:
http://www.parliament.uk/business/publications/research/key-issues-for-the-new-parliament/value-for-money-in-public-services/the-ageing-population/
http://geography.about.com/od/populationgeography/a/The-United-Kingdoms-Ageing-Population.htm
http://www.geographybase.co.uk/IB%20Geog%20HL%20Populations%20in%20TransitionRevision%20Notes%202012.pdf
There are many negative economic impacts of an ageing population. There is an increase in dependency ratio as more people will be claiming benefits such as sate pension, which are paid for by the working population through taxes, and less people working and paying for income taxes. There is also an increase government spending on health care and pensions and those in retirement tend to pay lower income taxes since they are not working and due to this, those in work may have to pay higher taxes. Also, there is a shortage of workers hence pushing up wages causing wage inflation. In 1900s, there were 22 people of working age for every pensioner but by 2024, there will be less than three. However, there are also positive economic impacts. Since there will be an increase in number of retired people, it will create bigger market for goods and services linked to older people and this will create more jobs for people so there will be less work shortage. Also, ageing population means that there will be a decline birth rate so there will be less young people, thus saving government money because young people require education money and pay no taxes.
Links:
http://www.parliament.uk/business/publications/research/key-issues-for-the-new-parliament/value-for-money-in-public-services/the-ageing-population/
http://geography.about.com/od/populationgeography/a/The-United-Kingdoms-Ageing-Population.htm
http://www.geographybase.co.uk/IB%20Geog%20HL%20Populations%20in%20TransitionRevision%20Notes%202012.pdf
A valid country should be chosen as an example [1 mark].
ReplyDeleteAward [1+1 marks] for each valid economic impact, provided that it is developed by means of explanation or detail.
Possible impacts could be: increased dependency ratio; potential shortage of labour; reduced revenue from taxation; reduced savings/investment; increased
demand on state pensions; increased demand on services/welfare for the elderly; increased insurance premiums; lower economic growth; introduction
of mandatory pension schemes; issues of younger family members having to care for the elderly.