The dependency ratio
The dependency ratio gives the proportion of the population that has to be supported by the working population. Young people and older people are generally dependent on the working population - they need to be looked after or supported financially.
Dependency ratio = (Young people + Old people) / Working age population
A high dependency ratio means there's a greater proportion of dependent people.
Social impacts of an ageing population
Increased pressure on public services - greater demand for services like hospitals and hospices. More people are needed to care for the elderly, so more carers and nurses will need training. Also, more unpain carers to their own elderly family members, putting pressure on them sociall and financially.
Unequal distribution of older people - e.g. Eastbourne is a resort with a high proportion of retired, older people. Areas like this may have inadequate facilities for young people.
Reduced population growth or decline - the working population may have fewer children because they already have older dependants, leading to a reduction in birth rate.
Longer working life - the state pension is low because there are so many retired people. It's ooften not enough to support people in their retirement so some may have to work beyond normal retirement age - to build up personal pensions or savings, or to add to their income from the state prison.
Economic impacts of an ageing population
Reduced work force - a smaller proportion of the population is working which may slow economic growth.
Increased taxes - pensions and services are paid for by taxes. A greater proportion of older people claiming pensions and support could mean higher taxes for the working pension.
Spending - the elderly have savings and pensions to spend (they grey pound).
CASE STUDY - UK ageing population
Like the most wealthy and developed countries, the population of the UK is ageing - people over 65 make up a large part of the population and it's increasing. In 2005, 16% of the population were over 65. This is expected to rise to 25% by 2041 - here's why:
Increasing life expectancy - between 1980 and 2006 life expectancy rose 2.8 years for women and 4 years for men. It's currently 81.3 for women and 76.9 for men. As people live longer, the number of older people increases.
Baby booms - lots of babies were born in the 1940s and 60s. These large generations are starting to retire, increasing the number of elderly people.
Falling birth rate - there are fewer young people, so the proportion of older people is greater.
UK ageing population causing problems
Pressure on the pension system - there aren't enough people of working-age to pay for an adequate pension for the retired population. State pensions are paid for by the working population through taxes:
- Today, 60% of the population are paying taxes that go towards the pensions of 19% of the population.
- By 2030, only 56% of the population will be working-age but the taxes they pay will have to pay for the pensions of 27% of the population of retirement age.
More elderly people living in poverty - the state pension isn't very large, and many people don't have other savings. The working population isn't large enough to provide a better pension.
Pressure on the health service - older people often need more medical care than younger people.
Strategies to manage the ageing population
The age of retirement has been increased - retirement age in the UK is currently 65 for men and 60 for women, but it will be raised to 68 for everyone by 2050. Increasing the retirement age means people have to work for longer, increasing the size of the working population.
Encouraging immigration of working-age people - the Uk has allowed unlimited immigration of people from countries who joined the EU in 2004. In 2004, around 80% of immigrants that came to the UK from the new EU countries were 34 or under. This also inreases the size of the working population.
Encouraging more women to have children - new UK pension proposals mean women won't lose out on state pensions if they take career breaks to have children. This could encourage women to have children. Working family tax credits support women (and men) who go back to work once their children are born, which might also encourage more couples to have children.