This study examines how demographic factors, specifically the old-age dependency ratio and the employment rate, have influenced public pension expenditures in Sweden between 2003 and 2021. Using quantitative methods, the analysis is based on secondary data from Statistics Sweden (SCB) and the Swedish Pensions Agency. The methods include linear regression, correlation analysis, and stationarity testing (ADF), conducted using SPSS. The results demonstrate that an increasing dependency ratio has a strong and statistically significant effect on rising pension costs, both in total and per employed person. In contrast, a higher employment rate is associated with a lower pension burden per employed individual. Although the correlation analysis initially suggests a positive relationship between employment and pension expenditures. The regression analysis reveals a negative association between elderly support ratio and pension expenditures. No cointegration was found between the time series, implying the relationships are short-term rather than long-term. The findings align with theoretical frameworks such as the life cycle hypothesis, the intergenerational contract, and demographic economic theory. The study concludes that higher employment can reduce the financial pressure of an aging population on the pension system. This means that it is important for more people to work for a longer time, especially as the population gets older. A higher employment rate helps spread the cost of pensions across more people, which reduces the pressure on the system. Making sure that more people are working, and for longer, can help the pension system remain stable in the coming years.