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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). It is used to measure the pressure on productive population.
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:
As the ratio increases there may be an increased burden on the productive part of the population to maintain the upbringing and pensions of the economically dependent. This results in direct impacts on financial expenditures on things like social security, as well as many indirect consequences.
The (total) dependency ratio can be decomposed into the child dependency ratio and the aged dependency ratio:
World Bank 2010 Age dependency ratio by country
As of 2010 Japan and Europe had high age dependency ratios compared to other parts of the world.
The inverse of the dependency ratio, the inverse dependency ratio can be interpreted as how many independent workers have to provide for one dependent person (pension & expenditure on children)
A high dependency ratio can cause serious problems for a country. As the largest proportion of a government's expenditure is on health, social security & education which are most used by old and young population. Also the increasing expenditure on pension becomes a problem too.
Migrant Labor Dependency Ratio
- Demographic characteristics
- Demographic economics
- Employment-to-population ratio
- Generational accounting
- Intergenerational relations
- Sub-replacement fertility
- Aging of Europe
- Aging of Japan
- Association of Public Health Epidemiologists in Ontario
- International Organization for Migration (2008). World Migration 2008: Managing Labour Mobility in the Evolving Global Economy, 440–, Hammersmith Press. URL accessed 21 August 2012.
- Old Age dependency Ratios in Europe
- Definition and Forecasts for Dependency Ratios
- The Risk Pool, Malcolm Gladwell, The New Yorker, 8/23/2006
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