Potential support ratio

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The potential support ratio (PSR) is the number of people age 15-64 per one older person aged 65 or older. This ratio describes the burden placed on the working population (unemployment and children are not considered in this measure) the non-working elderly population.[1]

As a population ages, the potential support ratio tends to fall. Between 1950 and 2009, the potential ratio decline from 12 to 9 potential workers per person aged 65 or over. By 2050, the potential support ratio is projected to drop further to reach 4 potential worker per older person. The reduction of potential support ratio has important implications for social security schemes, particularly for pay-as-you-go pension systems under which taxes on current workers pay the pensions of retirees.