We can see here the population distribution for Japan.

The population distribution is an important tool.

It shows us the number of people in each age category by sex and

enables us to identify the positions of the age profile where

the population is largest and smallest.

This is the distribution for Japan in 2010,

obtained from the Ministry of Health, Labor, and Welfare.

You can see there's a huge bulge in the top of the blue category.

That is the age group just prior to retirement.

So retirement in Japan typically happens at around about the age of 60, and

there's a huge bulge in that population category.

That is the baby boom population, they're all about to retire, and that bulge

is about to enter the red which is where the elderly people are classified.

This has important consequences for economic and health policy as we see.

So there are different ways of measuring aging.

One, the most common way of measuring it is to break the population down

into the working, the elderly,

and the child population, which I've here labeled Pw, Pe, and Pc.

The working population is the population aged 15 to 64.

Or if the retirement is not 65,

it's the population aged 15 up into that retirement age.

So typically in Japan,

we can measure the working population as the population aged 15 to 60.

The elderly population is the population aged 65 plus, or

from the retirement age on.

So as countries raise the retirement age, the elderly population will,

by definition, decline.

The child population is always the population age naught to 14, that is,

the population of children who are still in school.

Dependency ratios are the key measure of aging, and

they incorporate these specific population groups in their definition.

The dependency ratio is typically defined as the ratio of the elderly and

child population divided by the working population.

So essentially, it's the total number of dependents divided by the total number of

people working.

We can also calculate the old age dependency ratio,

which is simply the elderly population divided by the working population.

These give us basic information on demographic trends.

A dependency ratio will tell us the relative burden of care falling on working

people because it tells us how many elderly or child or

both populations are attached to each working person.

As that dependency ratio grows,

it tells us that each working person has to be more productive or has to do more,

in order to support the population that is not working.

It’s essentially a measure of the number of the dependents each worker

must support.

However, dependency rations don’t tell us a lot of things.

They don’t tell us what proportion of the working population is actually working.

We know that in younger age groups, lots of people are actually not working,

they're studying, and

they're effectively dependent, even though they're in the working age population.

And we know that many elderly people continue to work even though they're

effectively considered to be retired.

And this points to the big challenge with dependency ratios as a measure of aging,

which is they don't tell us the effect of non-demographic policies

on the aging problem.

So they'll tell us what will happen if we change births or if we change

the structure of the population, but they won't tell us what will happen if we

change the retirement age, or if we change the way people work after they retire.