North Dakota Dependency Ratio Expected to Increase

According to 2006 population estimates released by the Census Bureau, for every 100 working-age residents in North Dakota, there were approximately 53 nonworking-age residents. In other words, there were approximately two workers providing for every one dependent.

If the current age distribution patterns continue, 2020 projections indicate that this ratio will rise to 71 nonworking-age residents for every 100 residents of working age. In addition, 18 counties in the state are projected to have more dependents than workers by 2020.

“This is a situation that should raise concern among policymakers,” says Richard Rathge, director of the North Dakota State Data Center at North Dakota State University. “We have a limited window of opportunity to position ourselves for this reality and I think the time to start planning is now.”

This month’s “Population Bulletin,” a monthly publication from the North Dakota State Data Center, focuses on North Dakota’s dependency ratio. It measures the dependence that nonworking-age people have on working-age people. It indicates the economic responsibility of those who are economically active in providing for those who are not. The dependency ratio combines the proportion of people who are not of working age, either because they are less than 16 years old or because they are age 65 or older, and compares this total with the proportion of people who are of working age (16 to 64).

A decline in North Dakota’s youth during the past couple of decades, combined with the bulk of baby boomers moving through the prime labor force, has resulted in a declining dependency ratio (fewer dependents per worker). The dependency ratio, which was 64 nonworking-age residents per 100 working-age residents in 1990, declined to 58 per 100 in 2000, 55 per 100 in 2003 and 53 per100 in 2006. However, baby boomers soon will be leaving the labor force and entering retirement. In fact, the leading edge of the baby boomers (those born between 1946 and 1964) turned 60 in 2006.

As the dependency ratio increases, so does potential for concern among communities faced with an older, nonworking population. In 1990, the majority of nonworking-age residents in North Dakota were youth less than 16 years old. By 2020, retirement-age residents age 65 and older will capture the majority of nonworking-age residents. This shift in age structure will impact the types of decisions needed to provide services to an older, nonworking population.

NDSU Agriculture Communication