The dependency ratio from a historical perspective

Lies Lammens, Vrije Universiteit Brussel
Patrick Deboosere, Vrije Universiteit Brussel

The dependency ratio, probably one of the simplest demographic measures, has become a core notion in the ageing debate. The measure is so self-evident that it is scarcely debated and often used as a standard opener to question the affordability of the pension- and healthcare systems. Less well known is the fact that, before the Second World War, demographers as Alfred Lotka, Louis Dublin and Alfred Sauvy already warned for the sustainability of the pension system based on the evolution of the same dependency ratio. This finding invokes at least two research questions. The first concerns the variation of the demographic dependency ratio over time and across nations. Which demographic dependency ratios have nations been through and how exceptional are the actual and future dependency ratios? The Human Mortality Database and the UN population projections offer excellent data for the reconstruction of the historical evolution of the population structure by age for a large set of nations. The second research question concerns the validity of the concept of the dependency ratio and tries to assess its relevance by taking into account its historical, social and economic context. We mainly question how a demographic measure is turned into a measurement of economic dependency. The way the political and economic systems are organized and how the knowledge within a society is acquired and spread, are at least as important in the dependency debate. The labour participation of women, the general level of education, the average number of hours worked on a yearly basis and the evolution of the productivity rate are some of the important factors too often overlooked.