The dependency ratio is a demographic measure that compares the number of dependents (people aged 0-14 and 65+) with the total population aged 15-64. It provides insights into the number of people of non-working age compared to those of working age (Investopedia, 2023).
Key Facts
- Definition: The dependency ratio is a demographic measure that compares the number of dependents (people aged 0-14 and 65+) with the total population aged 15-64. It provides insights into the number of people of non-working age compared to those of working age.
- Components: The dependency ratio can be disaggregated into two categories: the youth dependency ratio and the old-age dependency ratio. The youth dependency ratio measures the number of children aged 0-14 per 100 persons aged 15-64, while the old-age dependency ratio measures the number of persons aged 65 or over per 100 persons aged 15-64.
- Calculation: To calculate the dependency ratio, you need to add the population of individuals aged 0-14 and 65+ and divide it by the population of individuals aged 15-64. Multiply the result by 100 to express it as a percentage.
- Implications: The dependency ratio is used to understand the relative economic burden on the workforce and has ramifications for taxation. A high dependency ratio means that the working-age population and the overall economy face a greater burden in supporting the aging population.
Components
The dependency ratio can be disaggregated into two categories: the youth dependency ratio and the old-age dependency ratio (UN, 2023).
- Youth dependency ratioMeasures the number of children aged 0-14 per 100 persons aged 15-64.
- Old-age dependency ratioMeasures the number of persons aged 65 or over per 100 persons aged 15-64.
Calculation
To calculate the dependency ratio, you need to add the population of individuals aged 0-14 and 65+ and divide it by the population of individuals aged 15-64. Multiply the result by 100 to express it as a percentage (Investopedia, 2023).
Implications
The dependency ratio is used to understand the relative economic burden on the workforce and has ramifications for taxation. A high dependency ratio means that the working-age population and the overall economy face a greater burden in supporting the aging population (Investopedia, 2023).
Sources
- Investopedia. (2023, June 27). What Is the Dependency Ratio, and How Do You Calculate It? https://www.investopedia.com/terms/d/dependencyratio.asp
- UN. (2023). Dependency Ratio: Examples and Definition. https://www.studysmarter.co.uk/explanations/human-geography/population-geography/dependency-ratio/
FAQs
What is the dependency ratio?
The dependency ratio is a demographic measure that compares the number of dependents (people aged 0-14 and 65+) with the total population aged 15-64.
How do you calculate the dependency ratio?
To calculate the dependency ratio, add the population of individuals aged 0-14 and 65+ and divide it by the population of individuals aged 15-64. Multiply the result by 100 to express it as a percentage.
What are the different types of dependency ratios?
There are two types of dependency ratios: the youth dependency ratio and the old-age dependency ratio. The youth dependency ratio measures the number of children aged 0-14 per 100 persons aged 15-64, while the old-age dependency ratio measures the number of persons aged 65 or over per 100 persons aged 15-64.
What is a high dependency ratio?
A high dependency ratio means that there are a large number of dependents relative to the working-age population. This can put a strain on the economy, as the working-age population must support a larger number of non-working individuals.
What is a low dependency ratio?
A low dependency ratio means that there are a small number of dependents relative to the working-age population. This can be beneficial for the economy, as the working-age population has more resources to invest in economic growth.
What are the implications of a changing dependency ratio?
A changing dependency ratio can have a number of implications for society. For example, a rising dependency ratio can lead to increased demand for healthcare and social services. It can also put a strain on the workforce, as there are fewer working-age individuals to support the growing number of dependents.
How can governments address the challenges of a changing dependency ratio?
Governments can address the challenges of a changing dependency ratio by implementing policies that encourage people to have more children, raising the retirement age, and increasing immigration. They can also invest in programs that support the elderly and disabled.