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