Dependency ratio

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In economics, the dependency ratio shows the relationship between the number of people not in the labor force and those in the labor force.

Those not in the labor force are the dependent part of the population.

Those in the labor force are the productive part of the population.

A high dependency ratio means that there were fewer working people to support health, social security and eduction services, which are used by the dependent sectors of a population.

This number is calculated by adding together the total number of young and old people and dividing that number by the  number of working age people.

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1. What is the opposite of dependent?

     --- independent.

2. what shows the relationship between the dependent part of population to the productive part?

   ---the dependency ratio

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Sometimes the dependency ratio is presented in two parts.

One part focuses on the ratio between children and working age population.

This is the dependency ration for the young.

The others is the ratio between the elderly and the working age population, which is the dependency ratio for the old.

Here are some dependency ratios for the old in five countries, China, India, Japan, US, and UK.

It shows the ratios at 3 different points of time: 2000, 2015, and 2050.

Note that the greatest percentage change from 2015 to 2050 is for China.

The dependency ratio nearly triples, from 13.1 to 39.

The other countries show gains, but as a percentage increase, they are less.

In Japan, the ratio increases from 43.6 to 71.8, which is less than double.

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What is the dependency ratio for Japan expected to be in 2050?---71.8%

In which country has the dependency ration increase the most since 2000?--Janpan

In  percentage terms, China's dependency ratio is expected to nearly triple.

Those not in the labor force are the department part of the population.

The other country show gains but as a percentage increase, they are less.

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The life expectancy for Japan in 2050 is predicted to be 93,  which is the highest of these countries.

A high life Expectancy obviously increases the dependency Ratio.

And note that the dependency ratio ignores the fact that those counted in the elderly segments of population are not necessarily dependent.

An increasing proportion of them are working, and many of those in the working age segments may not be working.

So this way of calculating the dependency ratio in a country can be misleading.

By pointing this out, we can see the danger of using such numbers to make policy without understanding how they are calculated.

In the end, details are important.

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If there is a high unemployment rate ,what happens to the dependency ratio?---it doesn't change.

When using numbers like dependency ratio to make policy, ...---One needs to understand how they are calculated

The higher the life expectancy, the higher the dependency ratio.

This way of calculating the dependency ratio in a country can be miss leading. 

A high life expectancy obviously increases the independency ratio.

The unemployment rate isn't taken in to account, so the dependency ratio doesn't change.