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) by the non-working elderly population.
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.
In 2015, Japan has the lowest PSR in the world, at 2.1.
- World Population Ageing 1950-2050, p 41 Definition of the Indicators of Population Ageing
- http://esa.un.org/unpd/wpp/Publications/Files/Key_Findings_WPP_2015.pdf, page 13.