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N.D. Dependency Ratio Expected to Increase

As the dependency ratio increases, so does potential for concern among communities faced with an older, nonworking population.

According to 2009 population estimates released from 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 month’s “Population Bulletin,” a monthly publication from the North Dakota State Data Center at North Dakota State University, focuses on North Dakota’s dependency ratio. A dependency ratio represents 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 65 or older and compares this total with the proportion of people who are of working age. As the ratio increases, there may be an increased burden on the productive part of the population to maintain the upbringing and pensions of the economically dependent.

“We are entering a new paradigm where the relationship between the working-age population and those who depend on the workers will become increasingly out of balance,” says Richard Rathge, State Data Center director. “Decision makers need to consider the challenges of this new situation and be proactive in their response.”

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 and 53 per 100 in 2009.

However, baby boomers soon will be leaving the labor force and entering retirement. In fact, the leading edge of the baby boom (those born between 1946 and 1964) will begin turning 65 in 2011.

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 65 years 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

Source:Richard Rathge, (701) 231-8621, richard.rathge@ndsu.edu
Editor:Rich Mattern, (701) 231-6136, richard.mattern@ndsu.edu
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