Dependency ratio

Topic: Measuring Development: Income, HDI and Sustainability · NCERT: Beyond NCERT

Meaning

The dependency ratio is the number of dependants (children aged 0–14 and older people aged 65+) for every 100 people of working age (15–64).

Dependency ratio = (Population aged 0–14 + Population aged 65+) ÷ Population aged 15–64 × 100

It shows how many non-earners each group of earners must support. A falling ratio can open a "window" for faster growth. A rising old-age ratio puts pressure on pensions and healthcare.

Explanation

How it works

• The ratio splits the population into three age groups:
• 0–14: children, who are mostly in school and not earning.
• 15–64: the working-age population, who are the possible earners.

• 65+: older people, who are mostly retired.

• The two dependant groups are added together. The total is then compared with the working-age group.

• The ratio is based only on age. It assumes that everyone aged 15–64 works and that everyone outside that range does not. In real life, some adults are jobless, some are studying and some older people still work.

Its two parts

• Child dependency ratio = 0–14 ÷ 15–64 × 100
• Old-age dependency ratio = 65+ ÷ 15–64 × 100
• The total dependency ratio is the sum of the two.

Worked example: a country has 100 people. 25 are children (0–14), 7 are elderly (65+) and 68 are of working age (15–64).

• Total = (25 + 7) ÷ 68 × 100 ≈ 47. So every 100 workers support about 47 dependants.
• Child = 25 ÷ 68 × 100 ≈ 37.
• Old-age = 7 ÷ 68 × 100 ≈ 10.
• Check: 37 + 10 = 47.

What makes it rise or fall

• Stage 1: fertility falls.
• Fewer babies are born, so the 0–14 group shrinks.

• The child ratio falls first, and the total ratio drops.

• Stage 2: the window opens.

• Many people from the earlier, larger birth groups are now of working age.

• The working-age share is at its highest and the dependency ratio is at its lowest. This is the demographic window of opportunity (a period of a few decades when there are the most workers per dependant).

• Stage 3: people live longer.

• Those workers grow old, and fewer young people replace them.

• The old-age ratio rises, and the total ratio climbs again.

• The population pyramid shows these stages (a population pyramid is a bar graph of population by age and sex):

• Expansive (wide base, high child ratio): Pakistan, where TFR is 3.4 (2021–23).
• Constrictive (narrowing base, falling child ratio): India now.

• Stationary (straight sides, rising old-age ratio): ageing societies such as China, where TFR is 1.2 (2021–23).

• China shows the risk. The one-child norm (1979-80) cut births sharply. The child ratio fell, but the population is now ageing fast, so fewer workers must support more elderly people.

In India

• Where India stands: India's dependency ratio is falling. UNFPA puts India's demographic window at about 2005–2055. This is an estimate.
• Why the child ratio is falling: India's TFR (total fertility rate: the average number of children a woman would have in her lifetime) fell to 2.0 in NFHS-5 (2019-21), from 2.2 in NFHS-4 (2015-16) [1][2]. This is below the replacement level of about 2.1 (the TFR at which each generation exactly replaces itself).

• SRS (the Sample Registration System, run by the Office of the Registrar General, India) shows the same trend: TFR fell from 2.3 in 2014 to 2.0 in 2021 [3].

• Why the old-age ratio will rise: the India Ageing Report 2023, released by UNFPA India with IIPS (International Institute for Population Sciences, Mumbai), gives these figures [4]:

• The 60+ share rises from about 10% (2022) to 20.8% by 2050, which is about 347 million people [4][5].

• The 60+ population is set to more than double, from 100 million (2011) to 230 million (2036) [4].

• The ratio differs by region:

• Kerala and Tamil Nadu reached low fertility early. They are ageing, so their old-age ratio is rising.
• Bihar (TFR ~3.0, NFHS-5) and Uttar Pradesh still have young populations, so their child ratio is high.

Don't confuse with

• Demographic dividend: the dependency ratio only measures how many dependants each worker supports. The dividend is the extra growth India gains if those workers are healthy, skilled and employed. A low ratio is a chance to grow, not a promise of growth.
• Demographic window of opportunity: this is the period (about 2005–2055 for India, by UNFPA's estimate) when the dependency ratio is at its lowest. The ratio is the measure, and the window is the time span.
• Ageing population (60+ share): the India Ageing Report 2023 counts people aged 60+ as a share of the total population. The old-age dependency ratio counts people aged 65+ against the 15–64 group only. The age cut-off and the denominator are both different.
• Child sex ratio (0–6): it counts girls per 1,000 boys aged 0–6 and measures gender bias. The child dependency ratio uses the 0–14 group and measures economic burden.

Prelims Hooks

• Dependency ratio = (0–14 + 65+) ÷ (15–64) × 100. Trap: working age is 15–64, not 15–59.
• Total dependency ratio = child dependency ratio (0–14 ÷ 15–64) + old-age dependency ratio (65+ ÷ 15–64).
• When fertility falls, the child ratio falls first. The old-age ratio rises later, as people live longer.
• UNFPA puts India's demographic window at about 2005–2055. In this period the working-age share is highest and the dependency ratio is lowest.
• The India Ageing Report 2023 was released by UNFPA India + IIPS. It projects that the 60+ share will reach 20.8% (~347 million) by 2050 [4][5].
• Population pyramids: expansive = Pakistan, constrictive = India now, stationary = ageing societies such as China.

Mains Points

• Dividend or disaster: India's falling dependency ratio opens a window (about 2005–2055). But a low ratio helps only if working-age people actually work.
• More jobs, better skills and more women in paid work → more earners per dependant → more savings, tax and growth.

• Without jobs → a young population can mean unemployment and unrest (GS-III: growth, employment).

• Two Indias, two ratios: the south (Kerala, Tamil Nadu) has a rising old-age ratio, while the north (Bihar with TFR ~3.0, UP) still has a high child ratio. So policy must differ by region:

• South: pensions, geriatric healthcare (medical care for older people) and care work.
• North: schooling, skills and family planning.

• This gap also shapes labour migration, Finance Commission transfers that use population as a criterion, and the delimitation debate (GS-II/III).

• Preparing for the old-age ratio: the 60+ population is set to rise from 100 million (2011) to 230 million (2036) [4]. That means fewer taxpayers for each older person and more demand for pensions and care. China's experience after the one-child norm shows that a fast drop in fertility without planning leads to early ageing. India must build old-age security while its window is still open (GS-II: welfare policy).

Related concepts

• Population growth rate
• Population density
• Sex ratio
• Son preference
• Total fertility rate
• Replacement level fertility
• Urbanisation
• Demographic window of opportunity
• Ageing population
• Population pyramid

Read more

• Demographic indicators of development