Dependency Ratio

Dependency Ratio is a measure used to assess the ratio of Dependents (individuals who are typically not in the labor force) to the working-age population (those typically aged 15-64). It helps to understand the economic pressure on the productive population.

The formula for calculating the dependency ratio is:

Dependency Ratio = (Number of Dependents / Working-Age Population) × 100

Dependents typically include:

• Children aged 0-14
• Elderly individuals aged 65 and older

For example, if a country has 30 million Dependents (20 million children and 10 million elderly) and a working-age population of 50 million, the dependency ratio would be:

Dependency Ratio = (30 million / 50 million) × 100 = 60%

Cases:

• High Dependency Ratio: In countries with aging populations, such as Japan, a high dependency ratio indicates a greater burden on the working-age population to support retirees.
• Low Dependency Ratio: In younger populations, like many African countries, a low dependency ratio suggests a larger working-age population relative to Dependents, potentially leading to economic growth opportunities.