What is dependency ratio?

The dependency ratio is the ratio of people not working/earning to the working/earning population.

For instance, A dropping TFR in India over the years has been reducing the dependency ratio, as there are fewer children below working age dependent on the working population.

So, A lower dependency ratio should ideally result in higher economic growth, as there is a large section of people consuming and saving.

On the other hand, improving living standards and medical advances over the past 40-50 years have prolonged life spans, thereby skew the dependency ratio at the other end of the age spectrum.

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