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The dependency ratio tells us how many young people (under 16) and older people (over
64) depend on people of working age (16 to 64). The dependency ratio is worked out with
A worked example should make this clearer. Pakistan, which is a developing country, has
41% of its population less than 15, and 4% over 65. This makes 55% (100 (41+4))
between the ages of 15 and 64.
New Zealand, a developed country, has 23% of its population less than 15, and 12% over
65. This makes 65% between 15 and 64.
Countries that have a high dependency ratio have more people who are not of working age,
and fewer who are working and paying taxes. The higher the number, the more people that
need looking after.