Demographic pressures and the sustainability of social security in Emerging Europe and Central Asia

Jaromir Cekota (jcekota@gmail.com) and Claudia Trentini (claudia.trentini@unece.org)
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Jaromir Cekota: United Nations Economic Commission for Europe
Claudia Trentini: United Nations Economic Commission for Europe

No 2012_2, ECE Discussion Papers Series from UNECE

Abstract: This paper investigates the long-term effects of population ageing in a number of ECE emerging market economies. The latest revision of the UN World Population Prospects implies that all of the countries of Eastern Europe, Caucasus and Central Asia (EECCA) and South-Eastern Europe (SEE) will experience population ageing over the period 2010-2050. In most of them, the ageing process will be associated with rising dependency ratios as the share of the working-age groups in the total population shrinks. In these economies, the combination of an ageing and declining population is likely to reduce the effective labor supply, threatening to undermine the sustainability of their public pension and health systems. The analysis of available demographic and economic data confirms the severity of the demographic crisis' consequences for fiscal sustainability. Further, the results provide compelling evidence on the necessity for most of the countries in the region to undergo wide reaching policy reforms with a particular focus on pension systems and labor markets. Ageing is one of the significant cost factors, but not the only one, that will impact health spending in SEE and EECCA countries. The public health sector needs to be reformed with a view to increasing its efficiency.

Keywords: aeging; social security; health; welfare; labor force; transition (search for similar items in EconPapers)
JEL-codes: H51 H55 I3 J11 P36 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2012-07
New Economics Papers: this item is included in nep-age and nep-tra
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Published in United Nations ECE Discussion Paper Series, No. 2012_2

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