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Economic Dependency Ratios: Present Situation and Future Scenarios. WWWforEurope Working Paper No. 74

Author

Listed:
  • Elke Loichinger
  • Bernhard Hammer
  • Alexia Prskawetz
  • Michael Freiberger

    (Vienna University of Technology)

  • Joze Sambt

    (University of Ljubljana)

Abstract

In this paper we compare several types of economic dependency ratios for a selection of European countries. These dependency ratios take not only into account the demographic structure of the population, but also the differences in age-specific economic behaviour such as labour market activity, income and consumption. In simulations where we combine patterns of age-specific economic behaviour 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. In addition, the specific definitions of the ratios will result in different interpretations of dependency. The choice 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.

Suggested Citation

  • Elke Loichinger & Bernhard Hammer & Alexia Prskawetz & Michael Freiberger & Joze Sambt, 2014. "Economic Dependency Ratios: Present Situation and Future Scenarios. WWWforEurope Working Paper No. 74," WIFO Studies, WIFO, number 50891.
  • Handle: RePEc:wfo:wstudy:50891
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    References listed on IDEAS

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    1. Bernhard Hammer & Alexia Prskawetz, 2013. "The public reallocation of resources across age: a comparison of Austria and Sweden," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 40(3), pages 541-560, August.
    2. David M. Cutler & James M. Poterba & Louise M. Sheiner & Lawrence H. Summers, 1990. "An Aging Society: Opportunity or Challenge?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 21(1), pages 1-74.
    3. Ronald Lee & Andrew Mason (ed.), 2011. "Population Aging and the Generational Economy," Books, Edward Elgar Publishing, number 13816, March.
    4. Alexia Prskawetz & Jože Sambt, 2014. "Economic support ratios and the demographic dividend in Europe," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 30(34), pages 963-1010.
    5. repec:fth:harver:1490 is not listed on IDEAS
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    2. Alexander J Q Parsons & Stuart Gilmour, 2018. "An evaluation of fertility- and migration-based policy responses to Japan’s ageing population," PLOS ONE, Public Library of Science, vol. 13(12), pages 1-14, December.

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