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Monday, 17 January 2011

Dependency ratio is......

The DR measures the fraction of dependents in a population.

Dependents: refer to people who are not in the workforce, such as those who are
either too young or too old to work.

Ratio: is always expressed as a percentage and is calculated by dividing the
number of people under age 15 and above age 64 by the number of people
between the ages of 15 and 64, then multiplying by 100.

The DR becomes a source of economic concern in countries with an old age DR, where there are a large number of dependents, particularly above age 64. This poses problems for providing social security and pension for those who have reached retirement age.

When DR increases, there can often be increased costs to the productive part of the population. Particularly for the upbringing of the youth and maintenance of the pensions and social security system of the elderly.

In countries facing aging populations, the dependency ratio and the phenomenon it describes are of great concern for this reason.

However, the population dependency ratio does not always provide an accurate representation of economic dependency since there are people between the ages of 15 and 64 who are dependents, such as the unemployed or handicapped, including those who are disabled and mentally ill