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In economics, the dependency ratio is the ratio of the economically dependent part of the population, to the productive part. The economically dependent part is recognised to be children who are too young to work, and individuals that are too old, that is, generally, individuals under the age of 15 and over the age of 65. The productive part makes up the gap in between (ages 15 - 64). This gives
Dependency ratio = ((% under 15) + (% over 65)) / (% 15 to 64) x 100
This ratio is important because as it increases, there is increased strain on the productive part of the population to support the upbringing and pensions of the economically dependent. There are direct impacts on financial elements like social security.
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