Answer to Question #95604 in Economics for Humayun Murtada Zaman

Question

Explain the effects of ageing population on
a) Firm
b)Economy/Government

Answer 1

The effects of ageing population are:

a) The supply of labor will be lower, so the firms will search longer for a new employee, and will have to pay more.

b) The economy will be worse off, because the total output will decrease. The government will receive less tax revenue, and will may more transfer payments.