Economics · May / June 2016 · Paper 22 · Question 3

2281

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The question as text

It is forecast that India’s working-age population aged between 15 and 64 will rise by 125 million between 2015 and 2025 and by a further 103 million over the following decade. Of course, not everyone of working age will be in work or will be seeking work. Changes in population and the labour force affect a government’s ability to achieve its economic aims.

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Show the answer and mark scheme

3(a)[2]
Identify two government economic aims. [2]
1 mark for each of two economic aims identified:
full employment/low unemployment/high rate of employment
price stability/low inflation/control inflation
economic growth
redistribution of income
high living standards/low poverty
balance of payments stability/favourable balance of payments/ reduce deficit or move to a surplus on the current account of the balance of payments.
3(b)[4]
Explain two reasons why someone may be of working-age but not in the labour force. [4]
A person may be a homemaker (1)
deciding to stay at home to e.g. look after children (1).
A person may be a student (1)
staying in education to improve qualifications/increase employment prospects/increase earning potential (1).
A person may have taken early retirement (1)
as may not need to work/may be unfit to work (1).
A person may be sick/disabled (1)
and so not able to work (1).
Some people who have been unemployed for a long time may give up the search for employment and so exit the labour force (1). These people are sometimes called discouraged workers (1).
A person may be working in the informal economy (1)
not in official figures (1).
3(c)[6]
Analyse what may cause an increase in a country’s labour force. [6]
Net immigration (1)
of people of working-age (1)
will increase the supply of potential workers (1).
A decrease in the number of people of working-age who are economically inactive (1)
reduction in those who are students/retired/homemakers/sick and disabled (1)
this may be the result of e.g. a fall in the school leaving age (1)
or rise in the retirement age (1).
An increase in the size of the population (1)
due to a fall in death rate/rise in birth rate/rise in the birth rate some years before (1).
An increase in the cost of living (1)
may force more family members to work/seek work (1).
3(d)[8]
Discuss whether an economy will benefit from having a younger labour force. [8]
Up to 5 marks for why it might:
A younger labour force may be more adaptable to new ideas (1)
more up to date with advances in technology (1)
received up to date education (1).
A younger labour force may be occupationally mobile (1)
more willing and able to switch jobs (1)
enabling the economy to adjust to changes in demand (1)
reducing structural unemployment (1).
A younger labour force may be more geographically mobile (1)
reducing structural unemployment (1).
A younger labour force may be physically stronger (1)
have less health problems (1)
be more productive/efficient (1)
be prepared to work longer hours (1)
increase output/GDP (1).
A younger labour force may work for lower wages (1)
reduce firms’ costs of production (1). Up to 5 marks for why it might not:
A younger labour force may be less experienced (1)
not built up skills (1)
less productive (1).
A younger labour force may require more training (1)
increasing firms’ costs of production (1).
A younger labour force may be less reliable and patient than the older population (1)
this may reduce demand for some products (1).

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