Dependency ratio

Dependency ratio is a measure in economics and demographics that compares the portion of a population which is composed of dependents (people who are too young or too old to work) to the portion which is composed of working age people. The dependency ratio is used to gauge the pressure on productive population.

Definition

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 the productive population.

Calculation

The dependency ratio is calculated by dividing the number of dependents by the total population, and then multiplying by 100. The formula is as follows:

Dependency Ratio = (Number of dependents / Total population) * 100

Types of Dependency Ratios

There are three types of dependency ratios:

1. Youth dependency ratio: This is the ratio of the young population (ages 0-14) to the working-age population (ages 15-64).
2. Old-age dependency ratio: This is the ratio of the elderly population (ages 65 and over) to the working-age population.
3. Total dependency ratio: This is the sum of the youth and old-age ratios.

Implications

A high dependency ratio can cause serious problems for a country. It means that the government and the working population must provide for the needs of more people who do not work. This can lead to increased taxes and social burdens on the working population.

See Also

• Demographics
• Economics
• Population
• Labor force

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