Quantifying Economic Dependency

Elke Loichinger (), Bernhard Hammer, Alexia Fürnkranz-Prskawetz, Michael Freiberger and Joze Sambt
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Elke Loichinger: Chulalongkorn University
Bernhard Hammer: Wittgenstein Centre for Demography and Global Human Capital, (IIASA, VID/OeAW, WU)
Michael Freiberger: Vienna University of Technology
Joze Sambt: University of Ljubljana

European Journal of Population, 2017, vol. 33, issue 3, No 3, 380 pages

Abstract: 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 (search for similar items in EconPapers)
JEL-codes: J11 J18 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (16)

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DOI: 10.1007/s10680-016-9405-1

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