what are the problems in the economy as a result of a decrease in the labour force paticipation rate and increase in the dependency ratio ?
Answers
Explanation:
Labour force participation rate is the ratio of the population in the age group 15 - 59, who are either employed or actively looking for jobs. This age group has the capability to contribute to the progress of the nation.
2) The age groups 0- 14 years and 60 years and above are included in the dependent group. Their proportion in total population is known as dependency ratio. This group depends on the working force of the country. An increase in the dependency ratio decreases the per capita income.
3) Decrease in the labour force participation rate and increase in the dependency ratio will hamper growth of economy, as there are less people involved in economic activities which is vital for economic growth. Higher dependency ratio will result into poverty, as there will be low per capita income.