European Journal of Population

, Volume 33, Issue 3, pp 351–380

Quantifying Economic Dependency

  • Elke Loichinger
  • Bernhard Hammer
  • Alexia Prskawetz
  • Michael Freiberger
  • Joze Sambt
Article

Abstract

In this paper we compare several types of economic dependency ratios for a selection of European countries. These dependency ratios take into account not only the demographic structure of the population, but also the differences in age-specific economic behaviour such as labour market activity, income and consumption as well as age-specific public transfers. In selected simulations where we combine patterns of age-specific economic behaviour and transfers with population projections, we show that in all countries population ageing would lead to a pronounced increase in dependency ratios if present age-specific patterns were not to change. Our analysis of cross-country differences in economic dependency demonstrates that these differences are driven by both differences in age-specific economic behaviour and in the age composition of the populations. The choice of which dependency ratio to use in a specific policy context is determined by the nature of the question to be answered. The comparison of our various dependency ratios across countries gives insights into which strategies might be effective in mitigating the expected increase in economic dependency due to demographic change.

Keywords

Population ageing National Transfer Accounts (NTA) Economic dependency ratio Age-specific consumption Age-specific labour income 

JEL Classification

J11 J18 

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Copyright information

© Springer Science+Business Media Dordrecht 2017

Authors and Affiliations

  1. 1.College of Population StudiesChulalongkorn UniversityBangkokThailand
  2. 2.Institute of Statistics and Mathematical Methods in EconomicsVienna University of TechnologyViennaAustria
  3. 3.Wittgenstein Centre for Demography and Global Human Capital, (IIASA, VID/OeAW, WU)ViennaAustria
  4. 4.Faculty of EconomicsUniversity of LjubljanaLjubljanaSlovenia
  5. 5.Vienna Institute of DemographyViennaAustria

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