Reframing the ‘old-age dependency ratio’

Purpose of research project *

The development of non-age discriminatory dependency ratios

Who has, is or will benefit *

The Treasury will benefit as a continued leader in measurement of the impacts of ageing. Older people will benefit from a social portrayal as contributors to society rather than primarily as dependants.

Description of impact *

In 2014 the Taskforce on Productive Ageing was established (becoming a Standing Committee in 2017) in association with the NSW Department of Family and Community Services to develop sustainable policy approaches to improve national productivity and health outcomes for older workers. The Committee aided in translating Professor Schofield and her team’s research program on health and its impact on older workers’ labour force participation into policy.

Recently the Committee identified concerns about the language related to older people in the influential Intergenerational Reports (IGRs) produced by the Treasury. In 2023-2024 I was invited to work with Treasury on this matter as I was a key contributor to the modelling and drafting of the first IGR, including development of the measure ‘non-demographic growth’. Of particular concern was the use of the ‘old-age dependency ratio’. This measures the number of people aged 65 and over for every 100 people of traditional working age (15 to 64) as a proxy measure of the impacts of structural population ageing. However, the measure is problematic in that it portrays all older people as ‘dependent’. The limitations associated with the widely used ‘old-age dependency ratio’ have also been highlighted by the UN.

I was able to identify that the policy environment had changed with the recent lifting of the age of eligibility for the age pension to 67 years, providing the impetus for a new measure. I developed an approach to population-wide dependency ratio measurement that was not age dependent, but would still allow for disaggregation by age so that the impacts of structural ageing could still be demonstrated.

Category of impact	Policy impacts, Society impacts, Economy impacts, Culture impacts
Impact level	Adoption (early)