Demographics and dependency ratio (Altenquotient)

Level 3 · Advanced

German termAltenquotient

Deep divesState Pension (Gesetzliche Rente)

An Altenquotient (old-age dependency ratio) divides the number of people above a stated older-age boundary by the number within a stated working-age range. It describes population structure, not actual workers, pensioners, contributions, or benefits. The age boundaries and projection assumptions must be stated before two ratios can be compared.

Why it matters

Germany's pay-as-you-go pension system uses current contribution and public revenues to finance current benefits. More older people relative to the potential working-age population can increase financing pressure. It does not mechanically dictate one policy: employment, wages, migration, contribution rates, retirement ages, federal transfers, and benefit formulas also matter.

Worked ratio

Suppose a population contains 4.5 million people aged 67 or older and 10 million people aged 20–66. The old-age dependency ratio is:

That means 45 people in the defined older group per 100 people in the defined working-age group. It does not mean every 100 workers personally finance exactly 45 pensioners. Some working-age people are not employed, some older people work, and not every person receives the same pension.

Read projections correctly

Destatis projections are conditional scenarios. Fertility, mortality, and net migration assumptions produce different population paths, so a range is evidence rather than noise. The 16th coordinated projection published in 2025 expects rapid ageing through the mid-2030s, but its variants diverge over longer horizons [1][2].

A household cannot hedge demographic policy risk with this ratio alone. It is a system-pressure indicator, not an individual pension forecast.

Check yourself

There are 4.5 million people aged 67+ and 10 million aged 20–66. What is the old-age dependency ratio per 100?

What does an Altenquotient of 45 mean?

45 people in the defined older group per 100 in the defined working-age groupEvery 100 workers personally support exactly 45 pensionersPension contributions must equal 45%

What must be stated when comparing dependency ratios? Select all that apply.

Numerator and denominator age bandsObservation or projection yearProjection assumptions when applicableA claim that projections are certainties

Why does a higher old-age dependency ratio not mechanically determine one pension policy?

Employment, wages, migration, rates, taxes, ages, and benefit formulas also affect financingDemography has no relevanceThe ratio predicts each household's pension

Why it matters​

Worked ratio​

Read projections correctly​

Check yourself​

Sources​

Why it matters

Worked ratio

Read projections correctly

Check yourself

Sources