Social Security and the Old Age Dependency Ratio

Forbes contributor Elizabeth Bauer provides an interesting perspective on the future of Social Security in America, focusing on the relationship between the number of workers providing tax income and the number of beneficiaries, using the term “old age dependency ratio” to describe the demographic shift that has been unfolding for some time. Her post highlights comments from the Social Security Trustees 2018 Report that indicate a projected downward movement in this ratio from 2.8:1 now to 2.2:1 by 2035, with gradual declines after that based on longevity estimates.

What’s most interesting about Ms. Bauer’s article is her connection between the old age dependency issue and the shifting composition of the U.S. workforce. As she points out, there is considerable debate around the impact of immigration policies and the assumption in some quarters that promoting high-skilled immigration is a key to economic improvement (and, by extension, part of the solution to Social Security’s long-term solvency problem and the old age dependency ratio matter). She puts a fine point on this debate with this statement: “immigration isn’t just about changing this ratio.  It’s not just about wages and taxes and costs for education and healthcare and ESL lessons.  It’s not just about GDP growth.  It’s about whether our country continues along its path of division or finds a way to work together for the common good.”

As mentioned earlier, Ms. Bauer provides an interesting perspective on social issues that go beyond the more immediate issue of Social Security reform. Read her article here…


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