1. Calculating the Dependency Ratio
AP Human Geography

2. Dependency Ratios Retired Dependents Retired Dependents Workforce
Child Dependents
Child Dependents
Source US Census Bureau International Data Base

3. Dependency Ratio
The ratio between the number of dependants (anyone above or below the working age) and the number of people in the potential labor force.
young dependents (YD): Anyone younger than 15
old dependants (OD): Anyone 65 and older
Dependency ratio = YD + OD x 100
People of working age

4. Calculating Dependency Example
Dependency ratio = YD + OD x 100
People of working age
YD= 500
OD= 250
People of working age = 600
Dependency ratio = x 100
600
Dependency Ratio = 125 (which means that for every 100 workers, there are 125 not working)

5. Importance of Dependency Ratio
It’s important because it shows the ratio of economically inactive compared to active.
Economically active will pay much more income tax
Economically inactive (dependents) are bigger recipients of government spending (education, pensions and health care)

6. Forecast for Dependency Ratios

7. Solutions for Higher Dependency Ratios
Raising retirement age in line with longer life expectancies
Encouraging immigration of people in early 20s and 30s
Reduced government funded pensions and encouraging private pensions (401K/403B)

8. Costs and Benefits of Ageing and Youthful Populations

9. Ageing Populations Causes
Life expectancy has increased, causing increased proportions of elderly
Costs
Heavy Burden on state finances through pensions and welfare payments.
Large demands on health systems
Reduced workforce
Population decline- if there’s also declined birth rates
Benefits
Workforce can work longer
Elderly can help look after grand-children which allows parents to work full-time.

10. Youthful Populations Causes Many LEDCs are have high birth rates.
Costs
High demand for education.
Need for many women to stay at home to care for children
High rates of unemployment
Increased poverty- more people are born into families, which are already poor.
Benefits
Large potential workforce often leading to cheap labor, which can attract new investment.
Less money is spent on healthcare.

11. Guided Practice
Use the Age/Sex Structures for Area A and B to complete the questions on the back to ultimately calculate the dependency ratios for both areas.
Raise your hand if you need help.