DEPENDENCY RATIO

The ratio of persons who are economically dependent on those who provide for them, either by earning incomes or paying taxes, is known as the dependency ratio. In demographic terms, the dependency ratio is defined as the proportion of those aged under fifteen and over sixty-five to all those between these ages, though this definition does not accurately represent economic dependency at the national level, since persons aged fifteen through sixty-four who are economically dependent, such as disabled persons, invalids, the mentally ill, or the unemployed, are counted inappropriately as independent. In public health and public-policy planning, therefore, indicators such as the number of people receiving disability benefits or the use of disability-adjusted life years would be more accurate for tracking dependency.

John M. Last

(see also: Demography; Economics of Health )

dependency ratio A simple indicator of the age composition of the population which typically varies in the range 0.5 to 1.00. Early definitions of the dependency ratio refer to the total number of young dependants divided by the total number of persons of productive age. More recently, due to the economic burden of ageing populations, the dependency ratio is defined as the total number of young and old dependants divided by the population of working age—for example persons aged under 15 and 65 and over divided by persons aged 15–64, or persons aged under 20 and 60 and over divided by persons aged 20–59 years. In both definitions, the two parts of the population are identified purely by age, rather than with reference to numbers actually working and not working. As national data sources improve in quality and frequency, this third—more precise—definition becomes a possibility, and is used in some studies. The dependency ratio is used by demographers to monitor trends over time in the age structure and relate them to the fertility rate, the mortality rate, and other demographic, social, and economic indicators.