Dependency ratio

A measure showing the number of dependents (aged 0-14 and over the age of 65) to the total population (aged 15-64). Also referred to as the "total dependency ratio".

Calculated by:

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This indicator gives insight into the amount of people of non-working age compared to the number of those of working age. A high ratio means those of working age - and the overall economy - face a greater burden in supporting the aging population.

The young dependency ratio includes only under 15s, and the elderly dependency ratio focuses on those over 64. For example, if in a population of 1,000 there are 250 people under the age of 15 and 500 people between the ages of 15-64. The youth dependency ratio would be 50% (250/500).

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The ratio of persons who are economically dependent on those who provide for them, either by earning incomes or paying taxes, is known as the dependency ratio. In demographic terms, the dependency ratio is defined as the proportion of those aged under fifteen and over sixty-five to all those between these ages, though this definition does not accurately represent economic dependency at the national level, since persons aged fifteen through sixty-four who are economically dependent, such as disabled persons, invalids, the mentally ill, or the unemployed, are counted inappropriately as independent. In public health and public-policy planning, therefore, indicators such as the number of people receiving disability benefits or the use of disability-adjusted life years would be more accurate for tracking dependency.

(SEE ALSO: Demography; Economics of Health)

— JOHN M. LAST

The ratio between the number of people in a population between the ages of 15 and 64 and the dependent population: children (0-14) and elderly people (65 and over). It is used as a rough way of quantifying the ratio between the economically active population and those they must support, but the age limits are somewhat arbitrary as, in the UK for example, 50% of over-16-year-olds go on to higher education, and are therefore still dependent, either on the state or, increasingly, on their parents or bank managers.

In economics and geography the dependency ratio is an age-population ratio of those typically not in the labor force (the dependent part) and those typically in the labor force (the productive part). In published international statistics, the dependent part usually includes those under the age of 15 and over the age of 64. The productive part makes up the population in between, ages 15 – 64. It is normally expressed as a percentage. This gives:

This ratio is important because as it increases, there may be an increased cost on the productive part of the population to maintain the upbringing and pensions of the economically dependent. There are direct impacts on financial elements like social security.

The (total) dependency ratio can be partitioned into the child dependency ratio and the aged dependency ratio^[1]:

See also

• Demographic economics
• Economic collapse
• Generational accounting
• Pensions crisis
• Sub-replacement fertility
• Societal collapse

Case studies:

• Aging of Europe
• Aging of Japan

References

• The Risk Pool, Malcolm Gladwell, The New Yorker, 8/23/2006

1. ^ Association of Public Health Epidemiologists in Ontario

External links

• Old Age dependency Ratios in Europe
• Definition and Forecasts for Dependency Ratios

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