introducing
Dependency Ratios
What's to come…
What are
dependency
Ratios?
Impacts of
youthful and
aging
populations
Dependency Ratios
Dependency ratios
• The population of a country can be divided
into two categories according to their
contribution to economic productivity. Those
aged 15-65 years are known as the
economically active or working population;
those under 15 (the youth dependency ratio)
and over 65 (the old age dependency ratio)
are known as the non-economically active
population.
Getting Started with dependency ratios
Dependency Ratio: is the relationship between the
working or economically active population and the
non-working population.
Youth Dependency Ratio- the ration of the number
of people 0-14 to those of 15-64 years.
Elderly dependency ratio: the ratio of the number of
people aged 65 and over to those aged 15-64 years.
e.g. UK 1971 (figures in millions):
• 13 387 + 7307
31616
x100 = 65.45
So for every 100 people of working age there
were 65.45 people dependent upon them
By 1999 the dependency ratio had changed to:
• 11 345 + 9 271 x 100 = 53.55
38 498
So although the number of elderly people had
increased, this was more than offset by the larger
drop in the number of children (the dependency
ratio does not take into account those who are
unemployed). The dependency ratio for most
developed countries is between 50 and 70, whereas
for less economically developed countries it is often
over 100.
What is the
dependency
Ratio?
Youth
dependency?
Elderly
dependency?
Importance of dependency ratios
• The dependency ratio is important because
the economically active population will
contribute more to the economy (taxes on
income, goods and business activity)
• The dependent population tends to be bigger
recipients of government funding (education,
health care, pensions).
• The increase in the dependency ratio can
cause significant financial problems for a
government if it does not have the financial
reserves to cope with such change.
Limitations of the dependency ratio:
• In developed countries few people leave education
before the age of 18, many do not get a job until 21 and
even retire before the age of 65.
• A large number of people in the economically active
group are staying home, such as parent to look after
children and other reasons.
• In developing countries many children are working full
or part time before the age of 15- some areas also have
high unemployment.
Video time: Watch and Learn
http://www.youtube.com/watch?v=Ao3flYBgdRU
Impacts of a youthful or
aging populations
Lets start with:
YOUTHFUL
POPULATION
Case Study- Malawi
Problems to Malawi's Youthful Population
Problems
• Pressure on providing adequate medical services and
health care. This may lead to widespread disease and
infections
• Education system under stress – lack of education
leads to under-paid, under-privileged jobs.
• Insufficient food supply – could lead to famine
• Increased rural-urban migration as rural areas unable
to sustain growing population. This could lead to
shanty towns
• Increased poverty and lower standards of living.
Advantages and disadvantages
Advantages
Disadvantages
- provides a large and cheap future
workforce
- puts strain on education and health
services
- provides a growing market for
manufactured products
- puts strain on food supplies
- provides a large tax base for the
country
- puts strain on available
accommodation
- lack of available jobs in the future
- Source of new innovation and ideas
Aging Populations
Video Clip
• http://www.youtube.com/watch?v=0ukNFMe
Zvcc&list=FLjCw18Dzx8TViPFSvwRAInA&index
=2&feature=plpp_video
Japan Case Study
Japan Case Study
Japan has an ageing population because the birth rates have fallen
and it has one of the world's highest life expectancy's. In fact the
islands of Okinawa off Japan's south coast have the highest life
expectancy and the greatest percentage of centenarians in the world.
Japan has the highest proportion of old dependents (about 23%) and
the lowest proportion of young dependents (about 13%) in the
world. It has a total fertility rate of only 1.25. This is well below the
replacement rate of 2.1.
Even though the Japanese are working longer, it may have to look
outside its borders to prevent future population decline and
economic decline. Japan is traditionally a very insular country so
allowing large scale immigration would involve huge social and
cultural changes.
Causes of an Aging Population
High life expectancy caused by:
-Good medical care
-Good diet and improved water supply
-Good sanitation and hygiene
Low birth rates caused by:
-Emancipation of women
-Cost of children
-Emigration of economically active
Advantages and disadvantages
Advantages
Disadvantages
-Elderly people have a lot of
-Shortage of economically
experience and can be valuable in the active
workplace
-Reduced taxation income for
the government
-Less money spent on schooling and
-Cost of providing healthcare
natal medical care
and care homes (elderly tend
to get sick more frequently)
-Lower crime rates and less money
-Reduced spending on
needed to be spent on policing
education, policing, transport
network, etc.
-Cost of paying for pensions
-Service decline (schools,
sports centres, etc. not used
by older residents)
Solutions to an Ageing Population
-Pro-natalist policies
-Increased immigration of economically active
-Increased retirement age
-Private pensions
-Private healthcare
-Increased taxes of economically active
• Videos: Ageing Populations: Chinas- Upside
down pyramid- 6 mins
http://www.economist.com/blogs/analects/2
012/04/chinesedemography?fsrc=nlw%7Cnewe%7C4-232012%7C1479315%7C37467942%7C
• Aging populations:
http://www.youtube.com/watch?v=QHCt6Pm
Ss0k