Dependency What is dependency? How is it calculated? Why is it important in demographic and economic terms?

Dependency

What is dependency?How is it calculated?

Why is it important in demographic and economic terms?

Young dependents – a good thing or bad?

And what about the old dependents – is their future bright?

From the syllabus….

Responses to high and low fertility• Explain dependency and ageing ratios. • Examine the impacts of youthful and

ageing populations. Evaluate examples of a pro-natalist policy and an anti-natalist policy.

Dependency

• The dependency ratio is an age-population ratio of those typically not working (the non-economically active or dependent population) and those typically in the labour force (the economically active or productive population).

• 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.

The dependency ration is normally expressed as a percentage….

Total dependency can also be partitioned…..

Kenya Example

• Population aged <15 = 42%• Population aged 65+ = 2%• Total dependency = 79%Which means that for every 100 economically active (working) people in Kenya there are 79 non-economically active people.

Cont….

• What is the child dependency for Kenya?

• What are the implications of these ratios?• Why is this data important; now and into

the future?

• How can Kenya respond?

UK Example

• Population aged <15 = 18%• Population aged 65+ = 16%• Total dependency = 52%

Thus, every 100 people working are supporting 52 dependents.

Cont….

• What about the old-age dependency in the UK? What is it now?

• How is this figure likely to change in the future?

• What are the implications for the UK?

• How can the UK respond?

Limitations

What are the limitations of the dependency ratio?

• Not all 15-64 year olds are actually working, doesn’t include unemployed for example

• Many 15-64 years olds are employed in the informal sector and thus not paying taxes and contributing to a countries tax revenue (especially in LEDCs)

• In many LEDCs many young people below the age of 15 are economically active.

• Increasingly in MEDCs people are working beyond 64 years old as pension pots shrink