Dependency Ratio

AAA

DEFINITION of 'Dependency Ratio'

A measure showing the number of dependents (aged 0-14 and over the age of 65) to the total population (aged 15-64). Also referred to as the "total dependency ratio".

Calculated by:

Dependency Ratio

INVESTOPEDIA EXPLAINS 'Dependency Ratio'

This indicator gives insight into the amount of people of non-working age compared to the number of those of working age. A high ratio means those of working age - and the overall economy - face a greater burden in supporting the aging population.

The young dependency ratio includes only under 15s, and the elderly dependency ratio focuses on those over 64. For example, if in a population of 1,000 there are 250 people under the age of 15 and 500 people between the ages of 15-64. The youth dependency ratio would be 50% (250/500).

RELATED TERMS
  1. Medicare

    A U.S. federal health program that subsidizes people who meet ...
  2. Pension Shortfall

    A situation in which a company offering employees a defined benefit ...
  3. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
  4. Dependent

    An individual whom a taxpayer can claim for credits and/or exemptions. ...
  5. Life Expectancy

    1. The age until which a person is expected to live. 2. The ...
  6. Endowment Effect

    The endowment effect describes a circumstance in which an individual ...
RELATED FAQS
  1. How does money supply affect inflation?

    Definitions matter when describing the relationship between changes in the money stock, or total money supply, and inflation. ... Read Full Answer >>
  2. What are the different ways that utility is measured in economics?

    It's difficult to measure a qualitative concept such as utility, but economists try to quantify it in two different ways: ... Read Full Answer >>
  3. What is the difference between adverse selection and moral hazard?

    In economics, moral hazard and adverse selection are two possible consequences of asymmetric information or ineffective information ... Read Full Answer >>
  4. What caused the American Industrial Revolution?

    The initial vestiges of industrialization appeared in the United States in 1790, when Samuel Slater opened a British-style ... Read Full Answer >>
  5. How does adverse selection contribute to market failure?

    Adverse selection is perhaps the most academically cited example of market failure in a laissez-faire economy. The problem ... Read Full Answer >>
  6. What types of assets and payments are recorded in the capital account?

    In terms of international trade and the balance of payments, the term "capital account" means different things in different ... Read Full Answer >>
Related Articles
  1. Retirement

    The Investing Risk Of Underfunded Pension Plans

    Determine the risk to a company's EPS and financial condition resulting from an underfunded pension plan.
  2. Home & Auto

    Taking The Surprise Out Of Long-Term Care

    Don't be caught unprepared - find out what to look for in LTC insurance policies.
  3. Economics

    What is Adverse Selection?

    Adverse selection occurs when one party in a transaction has more information than the other, especially in insurance and finance-related activities.
  4. Economics

    What is a Capital Account?

    Capital account is an economic term that refers to the net change in investment and asset ownership for a nation.
  5. Economics

    What is a Fiduciary?

    A fiduciary is a person who acts on behalf of another person (or people) to manage assets.
  6. Economics

    Explaining Property, Plant and Equipment

    Property, plant and equipment are company assets that are vital to business operations, but not easily liquidated.
  7. Economics

    Explaining PFIs and PPPs

    Public-private partnerships (PPP) and Private Finance Initiative (PFI) are two business relationships between government agencies and private businesses.
  8. Economics

    What is Market Failure?

    Market failure happens when economic conditions cause a market to be unable to reach supply/demand market equilibrium.
  9. Economics

    Understanding Externality

    An externality is a consequence of an economic activity that is experienced by unrelated third parties.
  10. Economics

    Understanding the Substitution Effect

    The substitution effect is an economic term used to describe consumer behavior relative to price or income changes.

You May Also Like

Hot Definitions
  1. Adverse Selection

    1. The tendency of those in dangerous jobs or high risk lifestyles to get life insurance. 2. A situation where sellers have ...
  2. Wash Trading

    The process of buying shares of a company through one broker while selling shares through a different broker. Wash trading ...
  3. Fixed-Income Arbitrage

    An investment strategy that attempts to profit from arbitrage opportunities in interest rate securities. When using a fixed-income ...
  4. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  5. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  6. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
Trading Center