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Economists have commented on Ireland's 'greying population', i.e - Leaving Cert Economics - Question 9 - 2009
Question 9
Economists have commented on Ireland's 'greying population', i.e. the structure of Ireland's population is getting older. Outline two economic effects of this develo... show full transcript
Worked Solution & Example Answer:Economists have commented on Ireland's 'greying population', i.e - Leaving Cert Economics - Question 9 - 2009
Step 1
(i) Possible increased tax burden:
Answer
As the number of individuals aged over 65 increases, the dependency ratio rises. This could lead to a higher tax burden on the working-age population, as more funds will be required to support pensions and elderly care. Consequently, the government may need to raise income taxes or implement new taxes to cater to the increased number of retirees relying on state support.
Step 2
(ii) Increased government expenditure:
Answer
The government is likely to face rising expenditures to provide necessary services for the elderly, such as healthcare, transportation, and social services. This increased spending may necessitate reallocating funds from other sectors, increasing public spending, or even borrowing to meet the demands of an aging population.