 |
Politics and Health CareDemystifying the Dependancy RatioOur recent issue brief “The Dependency Ratio: What Is It, Why Is It Increasing and What are the Implications?,” explains that the dependency ratio—an economic tool that is used for judging the ability of a nation to care for its citizens—is an inaccurate measuring device that should be replaced with a truer mechanism. The “dependency ratio”—the ratio of persons aged under 18 or over 64 to the number between 18 and 64—has risen in recent years. Speculation about this increase has led to fears that too few workers will have to support too many dependents. This argument, for example, has been used as justification to call for Social Security reform. According to our economists, these fears are unjustifiable and needless. They believe that the rise in the dependency ratio is, in fact, a positive symbol indicative of improvements in healthcare, and that the end result of the increased dependency ratio—when closely examined—has little, if any effect, on the economic status of a nation. A Potentially Dangerous SituationAs ILC Senior Economist Charlotte Muller, Ph.D. points out in the brief, it is a waste of quality resources to provide disincentives for people to stop working once they become 64 years of age and, furthermore, it creates a potentially dangerous situation that could lead to poverty in later life among those who outlive their savings.
“Fears about the increase in the dependency ratio are unwarranted and misleading. It is inevitable
that the dependency ratio will increase as a result of improvements in health and longevity,” said
Dr. Muller. “What should be focused on is making continued employment attractive to older
workers who are contemplating retirement.”
To learn more, or to download the issue brief, click on our Related Links, below. Back
|
ILC News
Get Involved
 |
Related Links: 
Keywords: 
Email Story
Print Story
RSS FeedPhone: +1 212-288-1468 Email: info@ilcusa.org