How do dependency ratio effects the countries economy?
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"Dependency ratio" refers to the "number of dependants in a population" divided by the "number of working age people". Dependants are defined as those aged from 0 to 14 and above 64 years. Basically the people who don’t earn or add to the economy of the country are included in the dependency ratio. An increase in the dependency ratio can cause a fiscal issue for the government. This happens because the economically inactive population will not pay income tax, or corporation tax and so on.
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