As Americans age, the ratio of folks in dependent age groups is going … down! Part 1

     With a greater proportion of Americans becoming “senior citizens” (oh how we dislike that euphemism!), you might think that a greater proportion of Americans are dependent on someone to take care of them. It turns out that the situation is just the opposite, at least for the time being.

     The solution for this mathematical puzzle is simple—while the old age dependency ratio has increased, the youth dependency ratio has been going down. In other words, as the proportion of older, theoretically more dependent folks, has been rising, the proportion of the under-eighteen dependents has been decreasing.

     According to Population Connection’s Marian Starkey in the December 2012 edition of The Reporter (page 2), “The dependency ratio is expected to grow less favorable in the coming decades, however;  it will reverse course and reach 79.9 dependents per 100 workers in 2050—quite a bit higher than today’s ratio of 58.9 … But at no time will our dependency ratio be as high as it was in the 1960s, when there were so many babies being born … this temporary blip will likely prove more manageable that the blip in the 60s because the elderly are better able to support themselves and contribute to the economy than are children.”    

Aging gracefully

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We have heard time and again about the perceived need to maintain, if not increase, our population in order to have enough adults of working age to provide for the old and infirm. In our book Enough of Us, we deal with this question. The limited size of this blog format, however, does not allow us to go into great detail about some of the misconceptions associated with an aging population. Suffice it to say that aging is not necessarily defined by a need for help from younger folks and that frequently the tables are turned, with older Americans bailing out their progeny.

     The ratio of working age population to non-working age population dropped slightly between 2006 and 2012. Demographers expect the proportion of non-workers to drop further in the next 17 years or so. That means that there should be less financial pressure on those in the working-age category.

     Current data indicate that the median age of the U.S. population will rise from 30 back in 1950 to 39 in 2030. This is not necessarily a bad thing. In fact, it can lead to an increase of individual economic output. “The potential is due to the swelling of the labor force and of levels of savings per capita,” according to David E. Bloom and Jay W. Lorsch of Harvard, in the same issue of The Reporter (page 13). “These accounting effects are typically magnified by the rise in women’s participation in the workforce that naturally comes with a decline in fertility, the boost to savings that occurs because the incentive to save for longer periods of retirement increases as people live longer, and society’s ability to comfortably reallocate resources from investments in children to investments in physical capital, job training, technological progress, and strengthening other institutions.”

     Rising fertility and slow economic growth frequently go hand in hand. But eventually an ever-rising median age will take its toll on society, if we do nothing to plan ahead for the increased costs associated with aging.

     Here’s why. In 1950, 8 percent of the population was 65 or older. Now it is 14 percent. In 2030 it will be 20 percent. Between 1950 and 2030 the population of those 85 and above will double from 1.2 to 2.4 percent. This is the segment of society that requires the greatest expenditures in medical care.

     Let’s take a look at some of the liabilities these factors present for American society.

  • With an aging population in the relatively near future, productivity could recede as less economically successful minorities become a larger proportion of the American workforce;
  • As the working age population decreases proportionately, shortages of skilled workers might impede U.S. competitiveness;
  • Financial problems might go hand in hand with an aging population that is dependent on the working-age population for financial and physical support as well as for companionship.

      These concerns, however, are not insurmountable. It will take action by cooperative and conciliatory legislative and executive branches of state and federal governments, as well as enlightened societal values that consider long-term results in order to benefit generations to come. Factions in our current Congress, however, seem more than willing to sacrifice long-term societal welfare at the altar of misguided principles and short-term political reward.

     We urge our readers to visit the online edition of this issue of The Reporter. You will find concerns and answers about matters that probably never occurred to you about the repercussions of population growth.

     But if increasing the size of succeeding generations is the only solution we are willing to consider in this time of short-sighted political vision, we are in for a heap of trouble.

     In Part 2 of this column we will take a look at what can be done by an enlightened society to both control population growth and provide for a balanced and robust economy.

     Whatever choices we make, population growth is not the answer. There are already more than Enough of Us.


  1. This is an interesting and provocative article. However, there one phrase regarding the economic consequences of an aging population that I don’t understand: “productivity could recede as less economically successful minorities become a larger proportion of the American workforce.’

    Are you saying that workers will be less educated? Isn’t there some way that non-workers can help support education for these minorities?

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