The big idea: When a country's fertility falls, the share of people who are of working age grows compared with the number of dependants (children and the elderly).
This can give a demographic dividend — a window when a large workforce supports relatively few dependants, which can boost the economy if there are enough jobs.
Key terms
- Working-age population — people aged roughly 15-64, the main workers and taxpayers.
- Dependants — people too young (under 15) or too old (65+) to be in the main workforce.
- Dependency ratio — the number of dependants per 100 working-age people.
- Demographic dividend — the economic boost when the working-age share is large and dependency is low.
Low ratio = the opportunity: A low dependency ratio means each worker supports fewer dependants, so more income can be earned, taxed, saved and invested.
The dividend is a window, not forever: as the working-age bulge grows old, the elderly share rises and the ratio climbs again.
How the gains arise
- Bigger workforce — more working-age people means more workers and a larger output of goods and services.
- Larger tax base — more earners pay more tax, giving the government revenue for schools, health and infrastructure.
- More savings and investment — with few dependants to support, families and firms can save and invest more.
- Attracts investment — a young, growing labour force can draw in foreign companies and factories.
Develop the point: Explain needs development — don't just say 'more workers'. Say more workers -> more output and tax revenue -> economic growth. End on the gain to the country.
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How this is tested: Paper 2 Q1 often opens with a dependency-ratio chart for several world regions, now and projected.
You State (read off) one value, and Identify a region whose ratio rises or falls between two dates. Read carefully and quote the units (dependants per 100).
| Region | 2020 | 2060 (projected) |
|---|---|---|
| Africa | 78 | 60 |
| Asia | 47 | 59 |
| Latin America | 49 | 62 |
| Europe | 55 | 75 |
| North America | 54 | 67 |
IB-style question - read the chart
Using the table above: (a) state Asia's dependency ratio in 2020 [1]; (b) identify the one region whose dependency ratio is projected to fall between 2020 and 2060 [1].
How to answer each part
- (a) State Asia's 2020 value. Find the Asia row, the 2020 column -> 47 dependants per 100 working-age people.
- (b) Identify the falling region. Compare 2020 with 2060 for each row. Only Africa falls (78 -> 60); every other region rises as it ages.
Final answer
(a) 47 (dependants per 100); (b) Africa - its ratio falls from 78 to 60.
State vs Identify: State = read the exact number straight off the chart. Identify = pick out the region/category the question describes. Neither needs a reason - just an accurate read.
Where the dividend is spent: A growing working-age population usually moves to cities for work, swelling megacities (urban areas of over 10 million people).
For individuals, megacities offer real opportunities - and the exam asks you to explain the benefits people gain from them.
| Benefit | Why it helps the individual |
|---|---|
| More and varied jobs | A huge labour market offers more work and higher wages than rural areas |
| Better services | Hospitals, universities and schools are concentrated, so access improves |
| Infrastructure | Public transport, electricity and water are usually more reliable |
| Social opportunity | Leisure, culture and contacts can raise quality of life and social mobility |
Lagos, Nigeria: Lagos has grown past 15 million people, drawing migrants from across Nigeria.
Why people come: far more jobs in finance, trade and services, plus better schools and hospitals than the rural areas they leave - the kind of individual benefits the exam rewards.