How the Increase of the Life Expectancy Affects the Old-Age Dependency Ratio

Abstract

The old-age dependency ratio is the ratio of the number of elderly people at an age when they are generally economically inactive, compared to the number of people of working age. It is an indicator of how many potential retirees a potential worker has to support. In the following paper the influence of mortality on the old-age-dependency ratio is investigated with the Gompertz model. Since the mortality of modern developed population is largely the mortality of old age, the Gompertz model provides a good approximation of low mortality life tables. Especially the effect on the ratio of changes in the life expectancy is investigated with approximation formulas using the life table for females of the United States in 2006. It will be shown that an increase in the life expectancy raises the old-age dependency ratio considerably.