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Risks and Consequences of Demographic Changes in Romania

Author

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  • Răzvan Bărbulescu

    (Bucharest Academy of Economic Studies, Romania)

Abstract

During the last decades we have experienced serious demographic changes observed in the decrease in both fertility and mortality and that led to the ageing of population. Despite the decrease in mortality is a good thing, the ageing make the current social security models ineffective on long term and therefore unsustainable. The demographic forecasts are pessimistic stating that the median age of population will change from 35 years to 53 years, making an unsustainable amount of people become socially assisted. Official forecasts state that the deficits necessary to sustain such a social assistance will lead Romania into a dreadful 633% public debt versus GDP. This working paper tries to find answers to questions like: What is the risk of continuing the current deficit model and how can we quantify them; What are the long term effects of the short term decisions leading to demographic changes; What are Romania’s choices for future decisions with respect to the analyzed risks and what can each decision lead to.

Suggested Citation

  • Răzvan Bărbulescu, 2010. "Risks and Consequences of Demographic Changes in Romania," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 13(36), pages 99-110, June.
  • Handle: RePEc:rej:journl:v:13:y:2010:i:36:p:99-110
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    More about this item

    Keywords

    population ageing; public debt; unsustainable pension plans; PAYG; social security; fertility; marriage;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D60 - Microeconomics - - Welfare Economics - - - General
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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