Dependency Ratio
AdvancedThe dependency ratio compares the number of people typically not of working age, children and older people, with the number of people of working age, showing how many dependants each working-age person supports.
The dependency ratio is usually calculated as the number of people aged under 15 and over 64, divided by the number aged 15 to 64, multiplied by 100. Some measures use different age ranges.
For example, a country with 40 million dependants and 60 million people of working age has a dependency ratio of about 67. For every 100 people of working age, there are about 67 dependants.
The ratio is often split into a youth dependency ratio and an old-age dependency ratio. Many developed countries face rising old-age dependency ratios as populations age and birth rates fall, which increases pressure on pensions, healthcare and long-term care, while the tax base of working-age people shrinks.
The dependency ratio is a simplification. Not everyone of working age works, and many older people continue working or support themselves through savings. Measures based on actual employment can give a more accurate picture, but the dependency ratio remains a useful indicator of long-term demographic pressures.
For worked examples and full lessons, visit notesbysara.org.