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Economic Consequences of the Demographic Crisis and Population Ageing

Author

Listed:
  • Nina Petrukha

    (Kyiv National University of Construction and Architecture, Kyiv, Ukraine)

  • Serhii Petrukha

    (West Ukrainian National University, Ternopil, Ukraine)

  • Yevhenii Velykyi

    (Institute for Demography and Life Quality Problems of the National Academy of Sciences of Ukraine, Kyiv, Ukraine)

Abstract

Despite attempts to stabilize demographic processes, such phenomena as a decrease in the birth rate, an increase in the total mortality rate, active emigration, and rapid population aging significantly affect the socio-economic situation in Ukraine. The study aims to empirically assess the relationships between the demographic crisis (decrease in birth rate, increase in mortality, emigration, population aging) and key macroeconomic indicators of Ukraine in 2010-2024. The study uses statistical data from official sources, particularly the State Statistics Service of Ukraine and the Pension Fund of Ukraine. The methodology combines descriptive and structural-demographic analytics, Pearson pairwise correlations, and least-squares multiple linear regression with dummy shock variables (2014-2015 – military-political shock and macrofinancial crisis; 2020 – COVID-19 pandemic shock; 2022 – full-scale invasion of the Russian Federation and related security/migration/fiscal effects), which allows us to separate trend and event components. Three alternative dependent variables (vector Y) are considered: ln(GDP per capita), ratio of employed persons to pensioners, and share of pension expenditures in GDP. Key results are presented for the model with the dependent variable "share of pension expenditures in GDP, %". The results of the study show that under the conditions of fixed demographic and fiscal-income factors, an increase in GDP per capita is accompanied by a decrease in the share of pension expenditures in GDP (the effect of denominator expansion and partial fiscal consolidation); an increase in social protection expenditures is associated with an increase in this share; dummy shock variables record significant level shifts (positive for 2014–2015 and 2022, negative for 2020); the impact of the ratio of employed persons to pensioners is statistically significant in the basic specification, but sensitive to the inclusion of shocks and fiscal regressors, which reflects the institutional inertia of the short-term dynamics of the pension share. The results of this study allow to substantiate three interrelated areas of state policy: the introduction of medium-term budget guidelines and standardized indexation rules for the social sphere; accelerating productivity growth and reintegration of the workforce (including women, pre-retirement age, and retirement age); and parametric modernization of the pension system to curb the growth of the age burden.

Suggested Citation

  • Nina Petrukha & Serhii Petrukha & Yevhenii Velykyi, 2025. "Economic Consequences of the Demographic Crisis and Population Ageing," Oblik i finansi, Institute of Accounting and Finance, issue 3, pages 206-221, September.
    • Handle: RePEc:iaf:journl:y:2025:i:3:p:206-221
    DOI: 10.33146/2518-1181-2025-3(109)-206-221
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    References listed on IDEAS

    as
    1. David E. Bloom & David Canning & Günther Fink, 2010. "Implications of population ageing for economic growth," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 26(4), pages 583-612, Winter.
    2. Vitaliy Shliakhetko & Nina Petrukha & Volodymyr Krupa & Ihor Berest & Ihor Baran, 2024. "Security issues in the formation and competition for human capital in the context of destabilisation of the European labour market," International Journal of Services, Economics and Management, Inderscience Enterprises Ltd, vol. 15(6), pages 677-695.
    3. Nicole Maestas & Kathleen J. Mullen & David Powell, 2023. "The Effect of Population Aging on Economic Growth, the Labor Force, and Productivity," American Economic Journal: Macroeconomics, American Economic Association, vol. 15(2), pages 306-332, April.
    4. Serhii Petrukha & Nina Petrukha, 2024. "Challenges for Developing Social Infrastructure in Rural Areas of Ukraine in the Context of Achieving the Sustainable Development Goals," Oblik i finansi, Institute of Accounting and Finance, issue 4, pages 159-168, December.
    5. Serhii Petrukha & Dmytro Konovalenko & Nina Petrukha, 2024. "Inclusive Economy And Public Finance: Current State And Principles Of Post-War Recovery," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 10(2).
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    Keywords

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    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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