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98 | HUMAN DEVELOPMENT REPORT 2013
FIGURE 4.5
Education policies can alter dependency ratios
Dependency ratio
0.95
0.85
0.75
0.65
0.55
0.45
1970
Dependency ratio
0.95
0.85
0.75
0.65
0.55
0.45
1970
1990
1990
Low HDI
2010
High HDI
2010
2030
2030
2050
2050
Base case
Fast
track
Base case
Fast
track
Note: See Technical appendix for a discussion of the base case and fast track scenarios.
Source: HDRO calculations based on Lutz and KC (2013).
(8.7 percentage points), countries where even a
more ambitious education policy would have
only a limited impact on dependency ratios
because education levels are already high.
Countries can respond to a declining labour
force in various ways. They can reduce unemployment,
promote labour productivity and
foster greater labour force participation, particularly
among women and older workers. They
can also outsource work to offshore production
and attract international migrants. 42
Without proper policy measures, demographic
dynamics can increase inequality in
Dependency ratio
0.95
0.85
0.75
0.65
0.55
0.45
1970
Dependency ratio
0.95
0.85
0.75
0.65
0.55
0.45
1970
1990
1990
Medium HDI
2010
Very high HDI
2010
2030
2030
2050
2050
Base case
Fast
track
Base case
Fast
track
the short run, given that differences in the
speed of the demographic transition across
households give richer households an initial
advantage. Declining fertility rates and shifts
in age structures can affect economic growth. 43
Reinforcing the cross-country analysis conducted
for this Report, a recent study finds that
youth dependency ratios tend to be higher for
poor households and lower for wealthier ones,
especially in Latin America and Sub-Saharan
Africa, and that differences in youth dependency
ratios between rich and poor dissipate
over time. 44 During demographic transitions,