unweighted support ratio (SRU) rose from 1962 to 1980 then plateaued until 2010, but it is expected to decline by 2050 (Figure 3-14). The disadvantage of this measure is that it assumes that workers of all ages have equal incomes and that the same amount is consumed by people of all ages.
The weighted support ratio (SRW) is a more sophisticated measure that improves on the unweighted version by allowing incomes of workers and consumption levels to vary by age. Specifically, the age patterns of consumption and labor income discussed previously (see Figure 3-10) are applied to the population by age to calculate the SRW. The ratio depends on the base year age profiles of consumption and labor income that are used. These are held constant to isolate the effect of changing population age distributions. It is a hypothetical “other things equal” calculation, not an attempt to project what the future ratios of labor income to consumption will be.
Trends and projections of SRW are presented in Figure 3-14 (top line), based on the labor income and consumption profiles of 2007 combined with each year’s population age distribution. The SRW is higher than the SRU mainly because income substantially exceeds consumption among
FIGURE 3-14 Unweighted and weighted support ratios, 1962–2050. SOURCES: Board of Trustees, Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds (2011); Lee and Mason, 2011; and projections by the committee.