What does the term "dependency ratio" indicate?

The term "dependency ratio" specifically measures the relationship between individuals who are typically not in the labor force (such as children and the elderly) and those who are considered of working age (typically ages 15 to 64, although this can vary by country). This metric is essential because it helps to assess the economic pressure on the productive population; a higher dependency ratio indicates that there are more dependents for each working individual, which can strain public resources, social services, and economic growth.

By knowing the dependency ratio, policymakers can better understand demographic trends and plan for future economic and healthcare needs, as a higher ratio may suggest an increased need for education, healthcare, and social security among the dependents. In contrast, other options do not accurately reflect the concept of dependency in the context of the population's ability to support non-working members. For instance, a comparison of children to adults does not encompass the elderly or working-age population comprehensively, and the ratios concerning employment status or trade balance are unrelated to demographic dependency.