Estimating economic dependency ratios with special reference to Maltese elderly population

Abstract

This article looks at the various definitions of dependency, in particular the economic-based dependency ratio. This ratio is defined as the ratio of the economically inactive and unemployed population over the employed component of the population. Unlike the age-based dependency ratio, this ratio takes into account economic activity rates for different age groups and other considerations such as the 'true economic contribution of women. An economic-based dependency ratio was constructed by the author with data for the Maltese Islands. An attempt was also made to isolate the effects on the level of economic dependency of changes in economic activity rates and the age structure. This was done through a 'decomposition analysis'. The purpose of disaggregating the economic-based ratio was to determine which effect was greater: changes in the labour force participation rate or changes in the age structure.