Media coverage of the 2016 Population and Migration Estimates, just issued by the Central Statistics Office, has focused on the return to net immigration. This, combined with the recent report that 2 million people are now at work in Ireland, has been used as evidence of an economic upturn in Ireland.
These headline figures mask an important change that has taken place in Ireland. That change is shown by the ‘dependency ratio’, which measures the relative size of younger and older populations (under 15 and over 64) compared to the working age population (between 15 and 64). This ratio is important, because working people provide funds for public services and benefits, such as full-time education, health care and pensions, that are used by the younger and older populations. The higher this figure, the more people have to be supported by each working person.
The total dependency ratio across the EU as a whole in 2015 was 52.6% (calculated by Eurostat). This includes the young dependency ratio (23.8%) and the old age dependency ratio (28.8%). In Ireland in 2016, the total dependency ratio in 2016 was 55.3%, made up of the young dependency ratio (34.5%) and the old age dependency ratio (20.8%). On one level, this shows that there are proportionately more younger people and fewer older people in Ireland than across the EU. It is possible to argue that Ireland’s high young dependency ratio is potentially positive, but this would only be the case if these young people remained in Ireland. Instead, the CSO figures show us that many young people have left, particularly those aged between the ages of 20 and 40.
In 2016, total dependency ratios varied across regions. The highest was the Border region (62.7%), while the lowest was Dublin (49.8%). There were also considerable variations in the young and old age dependency ratios. These are shown in Table 1.
Table 1: Dependency ratios by region in Ireland, 2016
| Total dependency ratio | Old-age dependency ratio | Youth dependency ratio | |
| STATE | 55.3 | 20.8 | 34.5 |
| Border | 62.7 | 24.6 | 38.1 |
| Dublin | 49.8 | 18.4 | 31.3 |
| Mid-East | 56.0 | 17.2 | 38.8 |
| Midland | 56.8 | 19.8 | 37.0 |
| Mid-West | 58.0 | 23.1 | 34.9 |
| South-East | 56.8 | 22.3 | 34.4 |
| South-West | 55.3 | 21.8 | 33.5 |
| West | 59.2 | 23.9 | 35.3 |
Source: Calculated from CSO Population and Migration Estimates 2016
The geographical variation highlights one problem, since some areas (e.g. Border, West, and Mid-West) have proportionately fewer economically active people. A second problem is the dramatic change in total dependency ratio since 2009, when the average in Ireland was 47.3% (see Table 2). This means that there has been a significant increase in the proportion of younger and older people who are supported by working people.
Table 2: Total dependency ratio by region in Ireland, 2009 and 2016
| 2009 | 2016 | |
| STATE | 47.3 | 55.3 |
| Border | 51.5 | 62.7 |
| Dublin | 42.5 | 49.8 |
| Mid-East | 47.0 | 56.0 |
| Midland | 51.5 | 56.8 |
| Mid-West | 48.6 | 58.0 |
| South-East | 50.6 | 56.8 |
| South-West | 47.8 | 55.3 |
| West | 49.2 | 59.2 |
Sources: Calculated from CSO Population and Migration Estimates, 2009 and 2016
Across the EU, changes in dependency ratios are attributed to declining fertility rates and ageing populations. This is not the case in Ireland, which consistently has one of the highest fertility rates in the EU. While the population of Ireland is ageing, the country has the lowest proportion of people aged over 64 in the EU. Instead, the key factor in Ireland’s changing dependency ratios is the decline in the proportion of the population aged between 15 and 65. This is a result of migration: in particular, the net emigration of almost 170,000 people aged from 15 to 44 in the years from 2009 to 2016. Net emigration is the main reason for the striking change in dependency ratios in Ireland.
Headline figures, such as a return to net immigration in 2016, mask the ongoing and persistent effects of austerity in Ireland. The increase in dependency ratios means that the working-age people who remain in Ireland have more people to support, particularly in rural areas. These geographical variations will intensify further in future years. There are long-term consequences from austerity, and the dependency ratios show this clearly, through the loss of a significant number of economically active people from the country. Headline figures must not distract us from this, more troubling, reality.
Mary Gilmartin
Ireland after NAMA 
_YB16.png){kind=link}
August 30, 2016 at 11:32 am
Dear Potentially Positive
Good piece Mary. Both Eamon Gilmore and Brendan Howlin advocated that for the Irish working class the only way out of a crisis is to “work our way out of it” Its what we do best and we are doing it. the 2million at work mark has been achieved again and with if Labour’s objective to put Construction back to work on a sustainable basis is achieved we can create the space to re-structure our economy to meet the well forecasted dependency ratio.
I’m for abigger and better Labour
best regards
Brian Brennan
August 30, 2016 at 1:56 pm
Hello Mary
At the time when the financial crisis hit in 2008 policies were actively pursued by public and private bodies that exacerbated this problem. As in previous downturns the reaction of the Irish business community was to place the largest burden on young people and actively encouraging emigration became government policy. The public sector stopped hiring down to a trickle and sometimes trade unions did deals that reduced pay of young incumbents while protecting pay of older workers. In the private sector Older employees were kept and told to do the work of young employees who were let go. The long term effects of this strategy have led to the massive increase in dependency ratios. We need to build up evidence like this for the next downturn so that we can try to convince State and Private employers groups like IBEC that the best solution for the medium term is to introduce wage cuts or shorter working weeks in times of recession rather than layoffs. These elements need to be included in contracts of employment. It is my opinion that by spreading the burden more evenly we could have had a shorter and less deep recession. I couldnt find any economists that disagreed with this thesis at the time, nor could I find any that were prepared to argue for it due to the fact it would not be in their own or the more powerful older members in their organizations interests. Making the case for more clever thinking at the time of the next downturn should start now and firm policies should be drawn up in order to be presented when the time arises. For example. Now is the time to make the case that contracts for employment in a small open economy like ours need to have clauses to take account of economic downturns.
September 6, 2016 at 10:40 am
Mary, you write: “This is a result of migration: in particular, the net emigration of almost 170,000 people aged from 15 to 44 in the years from 2009 to 2016. Net emigration is the main reason for the striking change in dependency ratios in Ireland.”
The problem is that the Census 2016 results showed that the population was actually 84,000 HIGHER than anticipated by the CSO. Given that births and deaths are very easy to keep track of, the difference is because the CSO substantially OVERESTIMATED net outward migration between 2011 and 2016. Given that most people who migrate are in the 15-44 age group I suspect that net outward migration of the age cohort in question was about half as much as you suggest.
It will be a full year until the Population and Migration Estimates are consistent with Census 2016, and until then it is hazardous to draw any sort of conclusions which compare the two.
Also, the 15-24 group is INEVITABLY shrinking at the moment. Live births fell from 74k in 1980 to 48k in 1994. You would want an incredibly high level of inward migration of that age cohort to stabilise its population.
Final point, total dependency ratio is indeed relevant, but under-15s are probably an order of magnitude cheaper to the taxpayer than over-65s.