Introduction
Societies need to function optimally to meet the needs of all people. The working population is critical since it produces adequate resources and food for itself and other members. Demographic dividends will tend to reshape the effectiveness of existing systems due to the issues of supply, demand, individuals’ needs, and economic goals. A country with many inactive members will be unable to record positive development outcomes.
This predicament explains why the Old Age Dependency Ratio (OADR) model has become a powerful tool for economic planning. This paper seeks to describe how the use of this metric can become an evidence-based approach for formulating new policies and frameworks to maximize the economic output of the elderly, engage them in productive activities, and reduce the implications of dependency on the overall health sector.
The Old Age Dependency Ratio
The OADR is a widely utilized ratio for comparing the number of inactive members of a given country or society vs. the working ones. The numerator usually considers or captures the unproductive age whereby an individual is unable to engage in meaningful economic building activities. This will include the elderly who are aged around 65 years and above (Balachandran and James 3). These individuals should receive adequate support and care through the existing social systems and facilities. The denominator for this ratio will include the productive or working individuals of the selected society.
This value tends to denote all members of the entire population who are aged between 15 and 64 (Sanderson and Scherbov). The derived number will portray the level of pressure a given economy will encounter while trying to support the nonproductive members or citizens. Koettl writes: “Old-age dependency ratio measures the number of those aged above 65 years (currently defined as old age) as a share of those between 15 to 64 years (currently defined as working age)” (p. 1).
Social, Cultural, and Economic Values
The social values of the OADR model are powerful attributes that many people cannot ignore. When a specific percentage of the population ages, many factors change that force all citizens to transform their behaviors, aims, and practices. Firstly, as the field of health as the social function becomes strained there are more individuals in need of personalized or specialized services. The government must present the relevant resources to improve the life experiences and outcomes of such individuals. Secondly, social security is one of the unique areas that developed nations do not take lightly.
The elderly will be in need of additional support and resources that their immediate family members might be unable to deliver. The government is, therefore, mandated to launch appropriate security funds that will fulfill such demands. Thirdly, human beings are social in nature and will always move from point A to B to greet their friends and relatives (Sanderson and Scherbov). In old age, new changes take place whereby people are forced to consider new ways of exercising and eating. Medical experts begin to propose superior or healthier diets that resonate with the demands of the elderly. Fourthly, individuals above 50 years of age begin to receive timely updates and information regarding how they can prepare themselves in the future.
Sociologists can utilize the OADR model to analyze various cultural values. For instance, the development or demographic stage of a community will reshape the cultural practices of its people. For instance, any increment in the number of people aged above 65 years means that entertainment will no longer be a priority. Aging members of society will also tend to engage in less risky sporting activities, such as golf (Sanderson and Scherbov). The nature of consumption will change whereby the working generation will be focusing on emerging technologies. The elderly might begin to consider new ways of passing across their cultural values or norms to the younger members of society.
The OADR metric presents a wide range of aspects that researchers and policymakers can consider to improve economic performance. The first value that stands out is that of reduced production. At the age of 65, many people will retire and stop contributing to the welfare or growth of their respective countries. Those who decide to use this model can go further to introduce superior measures to allow more people to undertake less strenuous or complicated roles in their respective fields. Such an initiative can make it easier for a given country to reduce the level of dependency (Balachandran and James 4).
The second one is that countries can accept the fact that such individuals will require additional welfare and social support. This means that the existing economy will have to be strained in an effort to meet their changing demands. Koettl believes that the productivity of the other members of society can decrease significantly since they will be required to take good care of the elderly. Relatives or friends of older people will tend to be affected the most. These attributes show that the OADR metric is an opportunity for understanding the potential economic values that can either promote or hinder the growth of a specific nation.
Benefits and Pitfalls: Losers and Gainers
The described metric has become one of the widely used frameworks for economic planning and decision-making. Some benefits will emerge that many analysts and policymakers tend to take seriously (Koettl). Firstly, this model will guide government agencies and other stakeholders to appreciate the level of dependency in a given community or country. This knowledge will empower them to make informed decisions that can result in superior systems and resources to meet the demands of the elderly.
Secondly, when the working population becomes small in comparison with the aging one, the government finds a reason to introduce superior measures for reabsorbing retirees and encouraging them to become more productive. For instance, Koettle asks: “If we all work longer, should we adjust the threshold of the old-age dependency ratio?” (p. 3). This approach can ensure that the level of dependency reduces significantly.
Thirdly, such a metric supports the establishment of social welfare programs and incentives that support the sustainability of the economy for a very long time. This becomes a reality since the available resources will be distributed in such a way that they can fulfill the needed of the identified beneficiaries. The end result is that the country will enjoy the outcomes of a fully functional social welfare system (Balachandran and James 5). Finally, this metric is essential since it informs the government when the other functions of the society need to be expanded or decreased, such as mental health for the elderly, geriatric health care, and psychological support.
On the other hand, some drawbacks will emerge when the government decides to consider this model as the best tool for planning. The first possible pitfall is that the practice can result in panic investments that might be aimed at meeting nonexistence needs. For instance, a population with many people aged between 65-70 years might not be a reflection of increased medical demands or expectations. The second one is that the metric fails to consider the proportion of individuals between 1-14 years of age (Balachandran and James 7). Such members of society are usually unproductive and do not contribute to the economy.
This means that the government can go further to pursue specific projects and social support systems that do not resonate with the demands of the wider population. The third possible pitfall is that a given society will not get a true picture of the number of people in need of social support at old age. This is possible since the metric only generalizes the demographics of the selected country.
Similarly, the adoption of the OADR model will benefit or affect certain members of the wider society. Firstly, the metric can result in the formulation of programs and policies that will tackle the predicted or existing challenges of the elderly. These members of the population will become more empowered and eventually lead high-quality lives. Secondly, the majority of the working population will benefit from evidence-based laws that are aimed at improving efficiency and making them more productive and successful in their respective fields (Koettl). These attributes will be instrumental in improving economic performance and addressing challenges that might arise.
Unfortunately, the OADR metric tends to generalize the needs and opportunities of a given population based on age. This means that disabled individuals or those with learning difficulties will be treated as productive while they are not. Consequently, the government will fail to implement superior laws and policies to meet their needs. The next group that is affected negatively includes people below 15 years of age. This metric pursues programs that will maximize the potential of the elderly and the working-age (Koettl). Young children will find it hard to engage in meaningful activities or pursue their goals diligently.
The above gaps explain why policymakers and decision-makers should be aware of the demands of all members of society and introduce an evidence-based model. This is the reason why Sanderson and Scherbov write: “we propose using a series of new measures that take changes in life expectancy, labor participation and health spending into account” (p. 1). This approach will improve different aspects of the economy and make it easier for more people to achieve their aims.
One of the outstanding models that can deliver positive results is the Multidimensional Old Age Threshold (MOAT). Balachandrana and James propose this model as a “measure that accommodates different dimensions of quantity and quality of older persons” (p. 1). This consideration will minimize the gaps associated with the OADR metric and improve the level of economic planning.
Conclusion
The above discussion has supported the OADR metric as a powerful framework for informing policy and planning decisions. The model allows the government to identify the changing demands of the population and offer timely incentives, support, or resources. Its adoption can improve economic performance and minimize the possibility of inefficiencies. However, those who decide to use it will be at risk of ignoring the needs of the disabled and young members of the population. A proper understanding of these issues will create new opportunities for applying this model effectively to promote economic development and sustainability.
Works Cited
Balachandran, Arun, and K. S. James. “A Multi-Dimensional Measure of Population Ageing Accounting for Quantum and Quality in Life Years: An Application of Selected Countries in Europe and Asia.” SSM – Population Health, vol. 7, no. 1, 2019, pp. 1-9.
Koettl, Johannes. “Did We Get the Old-Age Dependency’ of Aging Countries All Wrong?” Brookings, 2019. Web.
Sanderson, Warren, and Sergel Scherbov. “It’s Time to Measure 21st Century Aging With 21st Century Tools.” The Conversation, 2019. Web.