Jan 19, 2016
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