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Effects of population ageing on the pension system in Belarus

Katerina Lisenkova and Kateryna Bornukova ()

Baltic Journal of Economics, 2017, vol. 17, issue 2, 103-118

Abstract: Belarus currently has a relatively generous pay-as-you-go pension system, but population aging coupled with recent problems with economic growth will soon make it unsustainable. We build a rich overlapping generation model of Belarusian economy, which shows that without reform the Pension Fund will run into persistent and growing deficit, which will reach 9% of GDP by 2055. We also compute the fiscal projections of several parametric pension reforms, including the reform which will start in 2017. To avoid a deficit without reform, pension benefits would have to be substantially reduced. The increase of retirement age to 65 for both genders has a strong positive effect on sustainability of the pension system and keeps the deficit below 2% of GDP.

Keywords: Belarus; pension system; demography; retirement age; pension reform (search for similar items in EconPapers)
JEL-codes: C68 H55 J26 (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:bic:journl:v:17:y:2017:i:2:p:103-118