IDEAS home Printed from https://ideas.repec.org/a/nbb/ecrart/y2016mdecemberiiiip87-103.html
   My bibliography  Save this article

The sustainability of public finances in the context of population ageing

Author

Listed:
  • W. Melyn

    (National Bank of Belgium)

  • L. Van Meensel

    (National Bank of Belgium)

  • S. Van Parys

    (National Bank of Belgium)

Abstract

In virtually every country in the world, populations are growing considerably older, a development known as ageing. That process is farthest advanced in the industrialised countries. In Belgium, too, the population is ageing and that will continue in the coming decades owing to expansion of the older population and a temporary decline in the population of working age. These demographic developments have a huge impact on society. For instance, economic growth slows down owing to the temporary decline in the population of working age. In addition, there is a strong upward pressure on public expenditure relating to pensions, health care and care of the elderly as a result of the steep rise in the number of pensioners. This demographic change therefore brings serious social and economic challenges, including in the sphere of public finances. The article describes these challenges and investigates how the government can respond, including via an appropriate fiscal policy, an economic policy that encourages growth, and reforms in the sphere of pensions and health care, in order to maintain sound public finances in the long term.

Suggested Citation

  • W. Melyn & L. Van Meensel & S. Van Parys, 2016. "The sustainability of public finances in the context of population ageing," Economic Review, National Bank of Belgium, issue iii, pages 87-103, December.
    • Handle: RePEc:nbb:ecrart:y:2016:m:december:i:iii:p:87-103
    as

    Download full text from publisher

    File URL: https://www.nbb.be/en/articles/sustainability-public-finances-context-population-ageing
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Balassone, F. & Cunha, J. & Langenus, G. & Manzke, B. & Pavot, J. & Prammer, D. & Tommasino, P., 2008. "Fiscal sustainability and policy implications for the euro area," Working papers 225, Banque de France.
    2. Casper van Ewijk & Nick Draper & Harry ter Rele & Ed Westerhout, 2006. "Ageing and the sustainability of Dutch public finances," CPB Special Publication 61.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    3. Dries Dury & Luc Van Meensel, 2007. "The sustainability of public finances in the context of population ageing," Economic Review, National Bank of Belgium, issue ii, pages 81-95, September.
    4. Mr. Benedict J. Clements & Mr. Kamil Dybczak & Vitor Gaspar & Mr. Sanjeev Gupta & Mauricio Soto, 2015. "The Fiscal Consequences of Shrinking Populations," IMF Staff Discussion Notes 2015/021, International Monetary Fund.
    5. K. Burggraeve & C. Piton, 2016. "The economic consequences of the flow of refugees into Belgium," Economic Review, National Bank of Belgium, issue i, pages 43-61, June.
    6. Mr. Julio Escolano, 2010. "A Practical Guide to Public Debt Dynamics, Fiscal Sustainability, and Cyclical Adjustment of Budgetary Aggregates," IMF Technical Notes and Manuals 2010/002, International Monetary Fund.
    7. Casper van Ewijk & Nick Draper & Harry ter Rele & Ed Westerhout, 2006. "Ageing and the sustainability of Dutch public finances," CPB Special Publication 61, CPB Netherlands Bureau for Economic Policy Analysis.
    8. P. Bisciari & D. Dury & B. Eugène & L. Van Meensel, 2009. "Pension system reforms in the EU15 countries," Economic Review, National Bank of Belgium, issue iv, pages 21-45, December.
    9. Benedict J. Clements & Kamil Dybczak & Vitor Gaspar & Sanjeev Gupta & Mauricio Soto, 2015. "The Fiscal Consequences of Shrinking Populations," IMF Staff Discussion Notes 15/21, International Monetary Fund.
    10. Julio Escolano, 2010. "A Practical Guide to Public Debt Dynamics, Fiscal Sustainability, and Cyclical Adjustment of Budgetary Aggregates," IMF Technical Notes and Manuals 10/02, International Monetary Fund.
    11. Geert Langenus, 2006. "Fiscal sustainability indicators and policy design in the face of ageing," Working Paper Research 102, National Bank of Belgium.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zapji Ymélé Aimé Philombe, 2022. "Interest Charges and the “Said†Ageing-related Expenditures: A Study of OECD Countries," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 15(3), pages 7-23, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sèna Kimm Gnangnon & Jean-François Brun, 2020. "Tax reform and fiscal space in developing countries," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 10(2), pages 237-265, June.
    2. Gnangnon Sena Kimm, 2018. "Export Product Concentration and De Facto Fiscal Space: Does Openness to International Trade matter?," Global Economy Journal, De Gruyter, vol. 18(1), pages 1-12, March.
    3. Johann Bröthaler & Michael Getzner & Gottfried Haber, 2015. "Sustainability of local government debt: a case study of Austrian municipalities," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 42(3), pages 521-546, August.
    4. Westerhout, Ed, 2018. "Paying for the Ageing Crisis : Who, How and When?," Other publications TiSEM 417903d2-6318-4744-891e-1, Tilburg University, School of Economics and Management.
    5. Claudia Münch & Sweder van Wijnbergen, 2009. "Education and Labor Market Activity of Women: An Age-Group Specific Empirical Analysis," Tinbergen Institute Discussion Papers 09-099/2, Tinbergen Institute.
    6. Westerhout, Ed, 2018. "Paying for the Ageing Crisis : Who, How and When?," Discussion Paper 2018-001, Tilburg University, Center for Economic Research.
    7. Nicolas Afflatet, 2018. "The Impact of Population Ageing on Public Debt: A Panel Data Analysis for 18 European Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 8(4), pages 68-77.
    8. D’Erasmo, P. & Mendoza, E.G. & Zhang, J., 2016. "What is a Sustainable Public Debt?," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 2493-2597, Elsevier.
    9. Anderson, Ronald W., 2020. "Who bears risk in China's non-financial enterprise debt?," LSE Research Online Documents on Economics 118879, London School of Economics and Political Science, LSE Library.
    10. Andreea Stoian & Filip Iorgulescu, 2016. "The study of public debt: which are the distinctions between the emerging and advanced economies in the European Union?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 43(1), pages 167-196, February.
    11. Wenzlaff, Ferdinand & Kimmich, Christian & Richters, Oliver, 2014. "Theoretische Zugänge eines Wachstumszwangs in der Geldwirtschaft," ZÖSS-Discussion Papers 45, University of Hamburg, Centre for Economic and Sociological Studies (CESS/ZÖSS).
    12. Rob Euwals & Marike Knoef & Daniel Vuuren, 2011. "The trend in female labour force participation: what can be expected for the future?," Empirical Economics, Springer, vol. 40(3), pages 729-753, May.
    13. Lankester-Campos, Valerie & Loaiza-Marín, Kerry & Monge-Badilla, Carlos, 2020. "Assessing public debt sustainability for Costa Rica using the fiscal reaction function," Latin American Journal of Central Banking (previously Monetaria), Elsevier, vol. 1(1).
    14. Sang-Hyop Lee & Jungsuk Kim & Donghyun Park, 2017. "Demographic Change and Fiscal Sustainability in Asia," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 134(1), pages 287-322, October.
    15. Baum, Anja & Eyraud, Luc & Hodge, Andrew & Jarmuzek, Mariusz & Kim, Young & Mbaye, Samba & Ture, Elif, 2018. "How to calibrate fiscal rules : a primer," MPRA Paper 86423, University Library of Munich, Germany.
    16. Joshua Mason and Arjun Jayadev, "undated". "Fisher Dynamics in Household Debt: The Case of the U.S. 1929-2011," Working Papers 13, University of Massachusetts Boston, Economics Department.
    17. Afonso, António & Jalles, João Tovar, 2019. "The Fiscal consequences of deflation: Evidence from the Golden Age of Globalization," The Quarterly Review of Economics and Finance, Elsevier, vol. 74(C), pages 129-147.
    18. Jussi Lindgren, 2021. "Examination of Interest-Growth Differentials and the Risk of Sovereign Insolvency," Risks, MDPI, vol. 9(4), pages 1-14, April.
    19. Adriaan Kalwij & Arie Kapteyn, 2023. "The Effects of Social Insurance Benefits on Leaving Employment at Older Ages in the Netherlands," NBER Chapters, in: Social Security Programs and Retirement around the World: The Effects of Reforms on Retirement Behavior, National Bureau of Economic Research, Inc.
    20. Mr. Paolo Mauro & Jing Zhou, 2020. "r minus g negative: Can We Sleep More Soundly?," IMF Working Papers 2020/052, International Monetary Fund.

    More about this item

    Keywords

    Sustainability; demographics; ageing; health expenditure; public finances; budgetary surveillance;
    All these keywords.

    JEL classification:

    • H0 - Public Economics - - General
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • J1 - Labor and Demographic Economics - - Demographic Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbb:ecrart:y:2016:m:december:i:iii:p:87-103. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/bnbgvbe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.