Consumption- and Productivity-Adjusted Dependency Ratio with Household Structure Heterogeneity | Asian Development Bank

Consumption- and Productivity-Adjusted Dependency Ratio with Household Structure Heterogeneity

Publication | December 2017
Consumption- and Productivity-Adjusted Dependency Ratio with Household Structure Heterogeneity

A new dependency ratio measure takes into account the consumption needs of the young and elderly people, and the productivity of middle-aged people.

Population aging, now a new norm for almost all emerging economies, brings paramount challenges including increasing consumption burden from elderly people. A comprehensive policy reform, guided by a more scientific version of the dependency ratio, is needed to accommodate this new norm. This paper presents a new dependency ratio measure that takes into account the consumption needs of the young and elderly people, and the productivity of middle-aged people. Using household survey data from Bangladesh, Cambodia, the People’s Republic of China, Thailand, and Viet Nam, this paper estimates the factor of relative needs of people at different ages based on a regression model.

Contents 

  • Consumption- and Productivity-Adjusted Dependency Ratio
  • Data
  • Empirical Estimations of Consumption- and Productivity-Adjusted Dependency Ratio
  • Household Consumptions and Coresidence Style in the People's Republic of China
  • Consumption Simulations in the People's Republic of China
  • Conclusion
  • Appendix: On Estimating Household Income and Expenditure Using CHFS 2011 Data