Dependency Ratio

THE DEPENDENCY RATIO provides a rough measure of the demands facing the working-age population to take care of the dependent members of society. Increasing dependency ratios put strain on a society and risk increasing poverty, because more people must share what each member of the working population produces. Discussions of dependency ratios may refer to one of several types.

The youth dependency ratio is the number of people in the country aged 0–14 as a percentage of the number of people aged 15–64. The old-age dependency ratio shows the proportion of the population aged 65 and older to those aged 15–64. The total dependency ratio shows the total burden of dependents, as it adds the youth and old-aged and divides this by the number of people aged 15–64. A variation of this approach is the labor force dependency ratio, which adds the total number of people of any age who are not participating in the labor force, and then divides this sum by the total number of people who are participating in the labor force.

The United Nations Population Division provides an internet site, which allows users to view historical and future projections of the youth, old-age, and total dependency ratios for countries throughout the world. Worldwide trends of decreasing fertility and decreasing mortality are creating the situation in which youth dependency ratios are generally falling while old-age dependency ratios are increasing. The combination of these trends has mixed results for the total dependency ratio.

In the least developed parts of the world, as defined by the United Nations, the youth dependency ratios have historically been very high, peaking in 1980 at about 85 youths per 100 working-age people. As more young people survive to adulthood, the youth dependency ratio is falling; it is expected to be about 76 in 2005 and 45 in 2050. Meanwhile, old-age dependency ratios are increasing only slightly in the least developed parts of the world.

Since 1950, there have been about six elderly people per 100 working-age people in the least developed countries, and this ratio is only expected to increase to 10 in 2050. The combination of these trends means that total dependency ratios in the least developed parts of the world are decreasing, from 91 per 100 in 1980, to 82 per 100 in 2005, to 55 per 100 in 2050.

A similar trend holds in areas defined as less developed by the United Nations. Youth dependency ratios peaked at about 76 per 100 in 1970, and they are slowly decreasing. In 2005, the United Nations expects 48 youths per 100 working-age people. By 2050, this number is expected to fall to 32. Regarding old-age dependency ratios, the numbers are increasing from about seven in 1950, to nine in 2005, to 23 in 2050. In less developed countries, many more people are expected to survive to old age in the future. The combination of these trends will lead to relatively stable total dependency ratios, as the United Nations expects 57 dependents per 100 working-age people in 2005, and 55 dependents in 2050.

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