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The Retirement Risks Of Romania’S “Decree” Generation

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  • Adrian Lucian SALA

    (University of Craiova, Romania)

Abstract

After the Second World War, Romania’s population registered a decrease in numbers due to a high male death ration resulting from casualties. As the country started to recover from the social and economic effects of the war, the new political ideology - the socialism, started to steer the country in a new direction. Under its leadership, a boom in growth started occurring resulting in new economic production infrastructure being constructed. Thus, the necessity appeared for a much larger labor force to occupy the rising demand. To address this necessity, legislative changes were introduced to “encourage” childbirth, primarily through signing into law Decree 770 on the 2nd of October 1966. This resulted in approximately 1.5 Million newborns between 1967-1969, which will retire after 2030. In this paper, I will summarise the effects of this large portion of the population will have on the economy by applying the adequate statistical methods. The expected results would generate a rise in social security expenditures and an increase in older dependency ratios resulting in a higher burden on younger generations and causing a more significant drain of public resources. On these perspectives, I underline the main solutions in order to overcome or to reduce them.

Suggested Citation

  • Adrian Lucian SALA, 2018. "The Retirement Risks Of Romania’S “Decree” Generation," Scientific Bulletin - Economic Sciences, University of Pitesti, vol. 17(3), pages 125-132.
  • Handle: RePEc:pts:journl:y:2018:i:3:p:125-132
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    References listed on IDEAS

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    1. Raluca Drãcea & Mirela Cristea & Ionut Tomescu, 2009. "Empirical Analysis Concerning the Correlation Fiscality Rate – Tax Incomes in Romania," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 8(08(537)), pages 29-40, August.
    2. Mirela Cristea & Eleftherios Thalassinos, 2016. "Private Pension Plans: An Important Component of the Financial Market," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 110-115.
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    More about this item

    Keywords

    Baby boomer; Decree generation; Birth rates; Pensions; Dependency ratio.;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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