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Aging Crunch

Definition

An "aging crunch" refers to a situation in which a country has a growing proportion of elderly individuals and a decreasing proportion of working-age individuals, resulting in an inadequate number of workers to support the needs of retirees.

Analogy

Imagine a game where there are not enough players to pass the ball around. The older players keep holding onto the ball, but there aren't enough younger players to take over. This creates a problem because the game cannot continue smoothly without enough active participants.

Related terms

Dependency Ratio: The dependency ratio measures the number of dependents (children and elderly) compared to the working-age population. A high dependency ratio indicates that there are more dependents relative to workers.

Demographic Transition: Demographic transition refers to the process of change in birth rates and death rates as societies move from pre-industrial to industrialized economies. It is often associated with shifts in population age structure.

Social Security: Social security is a government program that provides financial support for retired and disabled individuals. In an aging crunch scenario, social security systems may face challenges due to insufficient funds or strain on resources.