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Measuring the Impact of World Aging
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1975
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2025
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Age dependency ratio (60+)
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15
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32
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Economic Dependent Population (45+)
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18
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40
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Table 1
We saw, in the previous unit, that there are a variety of measures and graphs that are used to think about or "picture" the age structure of a population.
Other measures and graphs are used to try and understand what population trends might mean to a society. Sometimes "dependency" or "support ratios" are used. The aged dependency or support ratio is the ratio of the number of older people in
the population to the population in the age categories most closely associated with employment (generally ages 15-64). This ratio is intended to give an estimation of the size of the older population in comparison to the size of the population that can be expected to pay taxes to support benefits for the older population.
This is a less then perfect measure since there are many older people working over the age of 64 and many younger people who are unemployed. It also does not take into consideration that many retired older people provide child care that allows adult parents to enter or remain in the workforce. However, it is a frequently cited statistic used by policy makers.
Youth dependency or support ratios are also used (number of children compared to number of adults expected to be in the work force) and sometimes youth and aging dependency/support ratios are combined to give a total dependency/support ratio indicating the expected number of working people/total population believed to need support.
As the number of "dependents" is predicted to increase compared to the number of "workers" in a population, policy questions arise. Developed nations frequently use dependency/support ratios. For other countries, generally the large developing nations, however, the proportion of elderly people relative to the total population is "small" (6 to 8% vs. 14-18%), but the absolute number is huge--- ranging from approximately 80 million in India to over 1 billion in China. This creates a different set of policy issues.
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1980
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2000
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2025
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Bangladesh
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9
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8
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12
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Bhutan
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9
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10
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12
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Burma
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12
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12
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14
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India
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9
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11
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18
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Indonesia
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10
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12
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20
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Nepal
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10
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10
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12
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Sri Lanka
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11
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14
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24
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Thailand
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9
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10
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21
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Regional Average
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10
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11
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17
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Table 2
The apparently favorable economic effect of slowing population growth in terms of total dependency / support ratio, actually increases the old-age dependency ratio. Because older dependents lay claim to more public resources than do young dependents, the weight of the "old" component of the total dependency / support ratio has great economic significance.
Table 1 shows that by the year 2025, in East Asia there will be about 32 older people for every 100 working age people. The corresponding figures for SEAR countries is shown in Table 2.
Looking at the tame data in terms of economic dependency of everyone older than 45 (defined as all people 45+ who are not wage earners), shows that by 2025, in East Asia, there will be 40 people economically dependent on 100 working people. Such a large dependency ratio has far-reaching social and economic implication.
With change in the age structure of the population consumption patterns of the people will change. The needs of older people are very different from the needs of middle aged and younger people. Thus, business will have to reorient their policies. Entire new products and marketing strategy will need to be developed.
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