Labor Force 2026: Economic Dependency Ratio In Selected Years: 1996 to 2026

July 20, 2018  by Laurie Northington in General   

Although unemployment is down and an additional 10.5 million people are expected to be employed over the 2016 to 2026 decade, the diminishing rate of labor force growth due to an aging population and other changing demographics is projected to further slow the U.S. labor force participation rate. This is the final factoid in a series of six factoids detailing the projected demographic shifts in the workforce as reported by the Bureau of Labor Statistics in 2017 Q4. *See factoid one in this series for Labor Force Methodology

In its purest form, full employment implies that any person wanting a job has one. The issue with employment data is that the Civilian Labor Force definition leaves out the number of people not looking for employment. These are the hidden numbers that are a challenge to economic growth.

The Bureau of Labor Statistics uses the Economic Dependency Ratio to highlight the impact of the non-employed which they define as the ratio of the number of people in the total population who are not in the labor force, per 100 of those who are. This is the portion of the population “dependent” on the working population. The BLS projections for 2026 highlight the growing economic pressure of the aging population on those in the workforce. The growth in the dependency of ages 65 and over will increase from 24.9 people per 100 workers to 30.9 older Americans. Even so, seniors still the lowest dependency ratio. The dependency ratio of 16 to 64 year olds not in the labor force increased steadily to 2016, but is projected to lessen slightly by 2026. In 2026 there will be an estimated 35 Americans between the ages of 16 and 64 who are not working per 100 American in the labor force. Children under 16 still have the highest dependency ratio, but it has declined from 45.4 per 100 to a projected 2025 ratio of 38.9.

A high dependency ratio can exacerbate the problems a government faces in health, social security & education costs, which are most used by the youngest and the oldest in a population.

Source: Employment Projections Program, U.S. Bureau of Labor Statistics *projected