Dependency Ratio

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Dependency Ratio
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Population Dependency Ratio The dependency ratio
tells us how many young people (under 16) and
older people (over 64) depend on people of
working age (16 to 64). The dependency ratio is
worked out with this formula
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A worked example should make this clearer.
Pakistan, which is a developing country, has 41
of its population less than 15, and 4 over 65.
This makes 55 between the ages of 15 and 64.
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New Zealand, a developed country, has 23 of its
population less than 15, and 12 over 65. This
makes 65 between 15 and 64.
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Old age Dependency ratios
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Figure 3 is a plot of known and predicted old age
dependency ratios for four MEDCs. It shows a
ratio of around 25 in the UK in 2000. This means
that, at present, there are about 25 pensioners
for every 100 workers. However, the ratio is
predicted to increase sharply after 2010,
climbing to over 40 by 2040. Expressing this
another way, the present ratio of 4 workers to
support every pensioner is predicted to fall
to 2.5 workers per pensioner by 2040.
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THE GLOBALISATION OF AGEING
From the outset, we need to be clear what is
meant by an ageing population. It is simply one
in which the balance between the young (under
15- or 19-year olds) and the elderly (over
60-year olds) components of a population shifts
towards the latter. The latter does not
necessarily have to be larger than the former. A
shifting balance is the critical
feature. Population Pyramids The basic cause of
the change in pyramidal shape is simply a
narrowing of the gap between birth and death
rates. The changes on a pyramid can be very
obvious you would see a narrow base and wide
top. Think about a a pyramid for a country in
stage 4 or 5 of the DTM. However, it can be much
more subtle than this as illustrated by India.
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In Indias case while the death rate will remain
at 8/1000, the birth rate is forecast to fall
from 22 to 17/1000. This will reduce the rate of
natural increase from 1.4 to 0.9 per annum. As
a consequence, the percentage of the population
aged under-15 years will decrease from 31.2 to
17.2, while that for those aged over 60 years
will rise from 7.5 to 11.8.
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Discussion
Is an ageing population just a characteristic
of MEDCs today or is it a global phenomenon?
Does the ageing of a population raise the same
issues, particularly so far as the elderly are
concerned, no matter where you are in the world?
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Any decline in the population growth rate means a
general ageing of the population
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AGEING POPULATION occurs when the median age of a
country or region rises. With the exception of 18
countries this process is taking place in every
country and region across the globe.
The population of the world is ageing steadily,
from 10 over 60 in 2005 to a projected 20 by
2050. As raw figures this is 670 million in 2005
to 2 billion in 2050. The increase in life
expectancy and the decline in fertility has led
to the median age of the population increasing.
Ageing populations can be viewed as the result of
technological and economic progress that has led
to reductions in both birth and death rates.
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Pensioners will soon outnumber children in Europe
and North America for the first time. Much of the
predicted increase in the numbers of the over-60s
will be in the better developed LEDCs,
particularly in Asia, where the problem of ageing
populations is likely to become as great a
concern to governments there in the near future
as it is in MEDCs today.
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Some facts about global ageing process
In 2000 there was ? million people aged 60 and
over. By 2025 this figure will be ? and by 2050
it will be ? . Soon one person in every three
will be over the age of 60.
600 1.2 billion 2 billion
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Where do you think the majority of the worlds
oldest people live?
Today about two-thirds of all older people are
living in LEDCs (the developing world) by 2025
the figure will be three-quarters.
Which age group in MEDCs do you think is the
fastest growing?
In MEDCs, the very old (aged 80) is the fastest
growing population group.
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In 2002 7 of the world population was over 65
years old. Only 1 of the population of the
United Arab Emirates was over 65 years old. China
has the largest elderly population (92 million)
but this is only 7 of the Chinese population.
Growing proportions of elderly people are partly
a result of people living longer and, often, of
fewer births reducing the size of the younger
population. Africa is home to only 6 of the
world's population aged over 65
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The of those living over 65 is increasing ,
with 25 over 65 in Japan, Italy and Germany, but
less than 5 in most tropical African countries.
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This summarises some key points. First, it
underlines the basic fact that the ageing of any
population is caused by a fall in either the
birth or the death rate. A fall in both rates may
be expected to accelerate the ageing. Secondly,
when you look at the main factors shown as
prompting both rates to fall, you will see that
they are perhaps more evident and active in
todays LEDCs. That being the case, it is small
wonder therefore that the ageing population is
undergoing a spread from its pioneering core in
Western Europe to many much less developed parts
of the world.
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Today the population of the UK which is gt65
accounts for 16 of the total population. By 2033
this will be 23, whilst that lt16 will be 18.
Causes
The impact of an ageing population
The policy response
What has been the impact of migration on the
population structure of the UK between 2004 and
2008? Why might a government wish to encourage
immigration to offset the effects of an ageing
population? Do you agree with this?
Use the Geofile on the VLE ? ageing population
2010
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UK An Ageing Population
Create an ageing population in the UK. In 2010 ?
only 16.5 of the UKs population was aged 0-14
(compared with Ugandas 50). ? an almost equal
proportion of the population was aged over 65
(compared with Ugandas 2.1). ? the UKs median
age was 40.5 one of the highest in the
world. Increasingly, however, older age groups
are beginning to dominate the UKs agesex
structure (Figure 5.22). This structure currently
looks like Stage Four of the DTM, but it might
soon look more like Stage Five if current
population trends continue In 2010 ? the UKs
natural increase in population was just 0.7 a
year one of the worlds slowest. ? the birth
rate was 10.7 per 1000. In many High Income
Countries (HICs), including the UK, birth and
fertility rates have been falling for decades. ?
the death rate was 10 per 1000. It has fallen
steadily over the last century. Life expectancy
at birth in the UK is now almost 80. This is
because of free universal healthcare via the NHS,
improved treatment for the biggest causes of
death (heart disease and cancer), and a better
lifestyle due to increasing wealth. The falling
fertility rate The UKs fertility rate first fell
below the replacement level of 2.1 in the 1970s.
It has remained below that crucial level ever
since. The drop in fertility rate has been
partly caused by the improved status of women in
British society. More women in the UK now go to
university than men. As a result of this higher
education, many women decide to
pursue professional careers before marrying and
having children in their thirties, rather than
their twenties. Many of these women then continue
their careers alongside raising a family.
In 2005, the UKs population reached the
milestone figure of 60 million. By 2010, an extra
1.3 million people had already been added to that
total. 61.3 million people crowded into just
under 250 000 square kilometres means a
population density of 243 people per square
kilometre In 2009, the UKs GDP per capita
(PPP) was 35 200 making it one of the worlds
largest and most influential economies. The UK
has fertile soils and a long industrial
background, but its the booming services sector
and knowledge economy that now dominates the
countrys wealth creation. The service sector
earns 75 of the UKs GDP (compared with just
1.2 from agriculture and 23.8 from industry/
manufacturing). However, despite its current
size and influence, the British economy is facing
an uncertain future. The UK has an ageing
population, with increasing numbers of people
moving from work into retirement. In 2010, the
average life expectancy in the UK for anyone
reaching their sixtieth birthday was another 23
years! The country has the serious problem of
working out how to support millions of people who
might be retired for 20 years or more.
This problem is not helped by the fact that the
UKs birth rate is falling, and has been for
decades. Where are the workers going to come from
to support the pensioners of the future? What
will happen to the UKs dependency ratio? Food
for thought! The UKs population structure For
almost every British family, there has been a
consistent fall in family size since 1900. The
stereotypical suburban 2.4 children per family
was coined in the 1950s having been about 5 in
1900. Now its about 1.7. At the same time,
people are living longer. The effect of this is to
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However, because many women now start their
families later in life, they have to face the
consequence that they will be less fertile at
that point. The chances of conception decrease
for a woman in her thirties, making it
more likely that family size for older mothers
will be smaller especially if they want to
return to work for periods between having
children. As well as many British women starting
their families later in life, increasing numbers
are also deciding never to have children at all.
In 2009, research by the London School
of Economics showed that 10 of women aged 45
were intentionally child-free, and that 25 of
younger women were also child-free at that point.
The researchers suggested that both figures will
increase in the future. One conclusion is
inescapable. At present, the UKs population will
not replace itself by natural change. Many
politicians quietly believe because the issue
is sensitive with public opinion that
immigration must be encouraged to maintain a
strong workforce and economy The ageing
trend Ageing is also known as the greying of
the population. By 2014, for the first time,
there will be more people aged over 65 in the UK
than under 16. Not only are more people surviving
into retirement, but many are living to a ripe
old age. There are already 1.2 million people
aged over 85 in the UK. Is immigration the
answer? Migration into the UK together with
most HICs is at an all-time high. But, until
2000, more emigrants left the UK (for places like
Australia and Spain), than immigrants
arrived. Immigration into the UK has come from
two main groups ? Since the late 1940s, there
has been a steady flow of immigrants from
Commonwealth countries such as India, Pakistan
and Caribbean nations like Jamaica, together with
smaller flows from Africa.

? In 2004, the EU was enlarged with ten extra
countries. Because of EU rules about the free
movement of labour in member states, there was a
surge in immigration to the UK from Central and
Eastern Europe. Polish migrants constitute the
UKs largest single migration ever. Alongside
social changes in the UKs population such
as falling birth, death and fertility rates
immigration has had a real impact, especially in
the last 30 years ? Immigration from India,
Pakistan and the Caribbean during the 1950s/60s,
coincided with a baby boom in the UK. As a
result, natural increase was responsible for 98
of the UKs population growth and
net immigration just 2. ? But, since the 1980s,
net immigration has contributed more and more of
the UKs population growth. As the fertility rate
has fallen, so has natural increase. ? From 2001
to 2008, net immigration added 180 000 people to
the population each year, compared with 90 000
from natural increase a ratio of 21. Recent
immigrants from the EU tend to be young and well
qualified. In 2008, about 70 of EU immigrants
who registered for work in the UK were aged
18-35, and most were graduates. Family related
migration is also becoming more common. Those
arriving with dependent children increased from
4 in 2004 to 15 by 2009. Birth statistics show
that the number of children born in the UK to
mothers from other EU countries has
increased substantially since 2004. Immigrant
populations tend to have a younger age structure
than the white British population (Figure
5.27). For example, large numbers of Black
Africans migrated to the UK in the mid-1980s as
children. Now, many of them have their own young
families, which explains the large percentages of
under 16s
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Problems
Benefits
Many retired people still do part- or full-time
work to keep themselves active and to
supplement their pensions. Over 25 of the
employees at DIY chain BQ are aged over 55.
Retired people are useful for companies, because
they can work flexible hours and do not carry
costs such as National Insurance. They also have
a lot of skills, experience and knowledge, which
can be passed on. Many businesses have developed
to service the grey pound (wealthy retired
people, such as those with generous private
pensions). For example, DIY outlets, gardening
centres, and specialist holiday companies. The
growing private health sector also regards the
ageing population as an opportunity. Firms
providing private healthcare insurance, e.g.
BUPA, or companies such as Boots (who offer
healthcare services), regard the elderly as good
business. The investment of pension funds by
fund managers provides a valuable source of money
for companies and organizations in both the
private and public sectors. For example, many
British pension funds invest in big companies
like BP.
Many elderly people only have the basic State
pension to live off. If the price of food or fuel
rises, its harder for those on fixed pensions to
compensate for it. Poverty amongst the elderly is
a major challenge for the government and for
non-governmental organizations, like Age UK,
which campaign on their behalf. The World Health
Organization (WHO) warns that ageing populations
worldwide will lead to increasing heart disease,
cancers, and diabetes. Treating these is
expensive and provides a real challenge for the
NHS and the voluntary sector (e.g.
Macmillan Cancer), which relies on donations of
money and time from volunteers. An ageing
population also creates a need for new housing,
e.g. smaller properties with no stairs, wider
doorways and lower kitchen units for those with
limited mobility. And sheltered accommodation for
those who need carers on site. A growing
pensions crisis is emerging. State pensions in
the UK are paid for by National Insurance (NI)
contributions from those in work. As life
expectancy increases, more people are
claiming pensions for longer. The ratio of people
in work compared to over 65s is falling. In 2000,
there were 3.7 people in work for every person
aged over 65. By 2040, this ratio will have
fallen to 2.1. The government will be receiving
less tax revenue from the smaller number of
workers, just as demand for pensions and
healthcare is rising.
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Population density in the UK
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Compare and contrast the age/sex pyramids shown
in Figures 3 and 4. What factors help to explain
their shapes? How are the economies of the two
places likely to differ as a result of their
differing population structures?
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What are the issues that are already apparent in
those countries with the most aged
populations? These are mainly in Europe and
perhaps surprisingly they include most of the
Catholic countries of southern Europe. Recent
research in those countries has revealed two
related causal factors 1) the wish of
increasing numbers of women in those countries to
have careers, and 2) a lack of nursery
facilities, crèches, etc. to look after children
while parents at work. The tension between these
two factors is such as to persuade many couples
to opt out of having children altogether.
So what are your perception of an ageing
population?
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more old people (more Saga louts) rising
ill-health increased expenditure on services
higher levels of dependency hindered economic
growth.
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What about positive perceptions.? WOOPies JOLLie
s SKI holidays
Well Off Elderly Persons Jet-setting Oldies with
Loads of Loot Spending the Kids Inheritance on
holidays
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Special needs of the elderly These needs are not
just medical (important though they are). They
range from large-print books to meals on wheels,
from stair-lifts to granny mobiles. The last two
perhaps remind us the one of the most acute needs
is to reduce the impairing effects of restricted
mobility both within and outside the home.
Foremost here then are services that help the
elderly to retain their independence and quality
of life. The growing stocks of granny flats,
wardened and sheltered accommodation, care homes
are a sign of things moving in the right
direction, but not fast enough. Developers and
local planning authorities have been slow to
anticipate the demand simply because they have
not bothered to look at forecasts of demographic
change.
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Coordinating care Meeting the diversity of needs
suggested above means the involvement of public
and private agencies of all kinds. All too often
the right hand does not know what the left is
doing. There is great scope for improving
cooperation and coordination. Maybe it will not
be too long before governments realise the
benefits of bringing together the many agencies
under a Ministry for the Elderly.
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Cost and access to services When the costs of an
ageing population are calculated, it is usually
the cost of pension systems that dominate the
debate. But there is another cost of almost the
same proportion to face that of the healthcare
and long-term care for the elderly that we have
just implied. Cost obviously leads to access. The
aim should be equality of access for all to all
those things that contribute to the quality of
life of the elderly. Is this an unattainable
ideal? Sadly, differences in income and in levels
of development lead to the creation of
insurmountable hurdles.
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Who cares? Clearly, this links with health. Much
also hinges on the prevailing family type and
housing situation. The extended family still
prevalent in LEDCs is likely to have a good
measure of in-built care. The nuclear family has
shifted the onus to professional providers in
the form of sheltered accommodation, care homes,
etc. This in turn creates a serious financial
issue for many families. There is a large amount
of global evidence to show that the elderly
are increasingly the victims of neglect, violence
and abuse. We are only too well aware of the
first two in the UK. In LEDCs, abuse relates more
to widowhood rites harmful to women, and
traditional practices involving older persons.
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A feminised cohort Given the biological fact of
greater female longevity, there is the prospect
of an expanding elderly cohort increasingly
dominated by women! Is this a heaven or hell
prospect?
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Migration moves Three types of migration are
becoming increasingly conspicuous in MEDCs - 1)
retirement, downsizing moves 2) bereavement
moves occasioned by the death of a partner, and
3) moves into specialist care accommodation.
There is the prospect that the convergence of
these migration moves could easily result in the
creation of grey ghettos, particularly within
towns and cities. There is also a wholly
different type of migration becoming evident. As
work in the care sector becomes less attractive
to native workers, both in terms of image and
pay, so increasing numbers of migrant workers are
being drawn in from overseas to fill key jobs -
from cooks and cleaners to nurses and doctors.
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Retirement pensions The fact that people in
MEDCs are, on average, now experiencing between
10 and 20 years of retirement is creating
enormous pressures on pension schemes, both state
and private. As the proportion of the population
creating wealth and paying taxes goes down, soon
a point is reached when income from taxes cannot
keep pace with expenditure on welfare. At
present, an average of 25 of GDP goes on welfare
spending in EU countries. Just under half of
this expenditure goes on pensions. In the UK,
where state pensions are already reduced to a
pitiful pittance, two moves are afoot. The first
is to raise the age of retirement. For women, it
is already going up to 65 it may soon be 67 for
everyone. Raising pension ages reduces the
pensioner population at a stroke. The second move
is to encourage everyone to invest in their own
private pension schemes. Recent
scandals associated with the selling of private
pensions have created a great deal of distrust.
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Contracting labour supply A contracting labour
supply, not just in the care sector, is something
that none of todays employers has ever seen.
Obviously, population ageing is the prime cause,
but there are other factors also contributing to
the skills and labour shortages. These include
early retirement and employers reluctance to
recruit what they see as grey labour
(often anyone over 50, and often the fall-out of
redundancy). Ignoring the skills and experience
of the over 50s is clearly a case of employers
shooting themselves in the foot.
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The grey pound An ageing population means a
broad shift in the pattern of consumer demand.
Again, elderly people have need of a particular
range of goods (possibly described as the A to Z
- from armchair recliners to Zimmer frames).
Retailers need to be increasingly alive to the
grey market as the young free-spenders dwindle in
number.
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The grey vote With a sizeable percentage of the
electorate of pensionable age (it might be
approaching 50 in the UK), the grey vote has, in
theory, a powerful political punch. In this
country, politicians and pensioners are only just
beginning to wake up to this potential power. It
was perhaps surprising that in the recent General
Election campaign in the UK there was little
focus on the elderly other than indirectly in the
contexts of the NHS and spending on social
services. As to the future, it seems clear that
MPs and political parties need to beware of one
reality ignore the grey vote at your peril!
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The grey lobby Also adding to this political
clout is the lobbying potential of the elderly.
They have the time, and most often the expertise,
to press their particular interests. They can be
much more single minded. If mobilised, the
elderly could readily become an articulate
and influential pressure group. Indeed, it could
be that an active pursuit of elderly issues could
lead eventually to the formation of a Grey Party!
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The grey MP Given that there is no upper age
limit on serving as a member of parliament, the
elderly cohort might find itself better
represented than in the past. Elderly MPS are
more likely to be disposed to fight their corner
on issues close to home and to the heart.
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Some concluding points At present, the issues of
an ageing population are most evident in MEDCs
where, because of greater life expectancy, the
elderly are a much more conspicuous component of
the population. It is too early to say whether or
not the issues will be the same in LEDCs as their
populations become more grey. At present, short
life expectancy and the prevalence of the
extended family mean that retirement, pensions
and care are not major issues. But should there
be a significant change in either of these two
factors, then the whole situation could change
quite dramatically.
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As the worlds population grows older,
governments in MEDCs must address the possible
economic consequences. Although operating under
different names and in different ways, welfare
systems exist in all MEDCs. Welfare systems cover
pensions, health care and social security. The
roots of the economic problem are not hard to
identify The proportion of working people,
who create wealth and pay direct taxes, is going
down. The proportion of the elderly people
dependent upon the welfare system is
increasing. A point must be reached where the
amount being paid in cannot keep pace with the
amount that needs to be paid out
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At present, an average of 25 of GDP goes on
welfare spending in EU countries. Just under half
this expenditure goes on pensions. The rest goes
on unemployment benefits and maternity, housing
and family allowances, which are spread
more broadly through the age ranges. In addition
there is significant state spending on health
services, available to all age groups, but which
are consumed more by the elderly.
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In his recent book, Agequake, Paul Wallace
predicts that Populations in Europe generally
are poised to plunge on a scale not seen since
the Black Death. He speaks of a glut of
retirees, supported by fewer and fewer workers
of overloaded state pension systems facing
bankruptcy. The breakdown of European economic
and monetary union, and stock market crashes as
the babyboomers start cashing in their shares (in
around 2024, if you want the most likely date)
are other elements of this scenario.
Agequake reads a bit like Malthus, but the focus
of the book the change in demographic structure
within the worlds most developed countries
lies beyond even the wildest dreams of the
Reverend Thomas Malthus.
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What are the strategies to manage an ageing
population?
Encourage larger families Raise retirement
age Encourage immigration Increase health care
provision
How do these work? Why may they be
controversial? Which ones would you adopt?
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Case study Managing Populations Ageing
Population UK
Complete a mind map. Include.
What problems does an ageing population cause?
Why does the UK have an ageing population?
Facts and figures Scale of the issue
What is being done to manage the ageing
population and are they sustainable?
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• We need to make sure we understand
• Causes of an ageing population (social, economic
  and political)
• Impacts of an ageing population
• Managing an ageing population

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Figure 1 Distribution of people aged 65 and over
in the UK 2003.
Describe the patterns shown on figure 1 (5
marks) Suggest reasons for the patterns you
outlined above (5 marks)