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Effects of population ageing on the pension system in Belarus

Author

Listed:
  • Katerina Lisenkova

    (Fraser of Allander Institute, University of Strathclyde, Glasgow, UK)

  • Kateryna Bornukova

    (Belarusian Economic Research and Outreach Center (BEROC), Minsk, Belarus)

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.

Suggested Citation

  • Katerina Lisenkova & Kateryna Bornukova, 2017. "Effects of population ageing on the pension system in Belarus," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 17(2), pages 103-118.
    • Handle: RePEc:bic:journl:v:17:y:2017:i:2:p:103-118
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    File URL: http://www.tandfonline.com/doi/full/10.1080/1406099X.2017.1318000
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    Cited by:

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    2. Alexandru Cojocaru & Mikhail Matytsin, 2017. "Poverty and Shared Prosperity in Belarus over the Past Decade," World Bank Publications - Reports 28581, The World Bank Group.
    3. Huan Wang & Jianyuan Huang & Shuangyue Sun, 2019. "Assessment of the Financial Sustainability of China’s New Rural Pension Plan: Does the Demographic Policy Reform Matter?," Sustainability, MDPI, vol. 11(18), pages 1-22, September.

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    More about this item

    Keywords

    Belarus; pension system; demography; retirement age; pension reform;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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