A Standardized dependency ratio

Abstract

The dependency ratio is a measure of the effect which demographic factors exert on standards of living. It is usually defined either as the ratio of the young and the aged population to the working age population, or as the ratio of the population which does not participate in the labor force to that which does. But the consumption requirements of dependents may vary with their age. Therefore, variations in the real burden of maintaining a dependent population need not be positively associated with variations in its relative size; for example, when a decrease in the relative number of all dependents is accompanied by an increase in that of the aged. Furthermore, under the labor-force participation definition of dependency, inter-temperal and international variations are complicated because the population's average participation rate does not vary only with changes in its age distribution, but with changes in the social norms which regulate working habits. In this paper, adult-equivalence scales derived from family budget studies were used to make dependents of various ages comparable in terms of the maintenance burden they create. Similarly, constant labor-force participation rates were used to obtain estimates of the size of the population carrying this burden. When thus estimated, international differences in the dependency load are shown to be much smaller than is suggested by the normally used unweighted index. © 1967 Population Association of America.