Demographic Dynamics And Sustainability Of Public Pension Expenditures Within European Union-15 Member States

Recent demographic dynamics within the European Union member states urge public decidents to find the right measures which could further on assure the sustainability of social public expenditures. Most of the specialised literature mainly highlights the macroeconomic variables which may affect the size of public pension expenditures. Nevertheless demographic effects, like fertility rate, old-age dependency ratio, effective retirement age or life expectancy are also important factors of the sustainability of social security expenditures, this also due to the latest economic approaches. Our econometric testing confirms the high relevance of all these variables upon public pension expenditures within EU-15 member states. Consequently, there should be some special measures which governments may consider in future public policies. We suggest that retirement should come later in citizens lives, but in order to enforce this new approach there is an urgent need of appropriate jobs which could be available for older generations. In fact the solution towards an increasing proportion of older people in nowadays society should be “active ageing”: encouraging older people to stay active and retire later. Also extremly important are the outcomes of targetting healthy and autonomous lives.