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Aging Population-A Cloud On Romania’S Economic Future

Author

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  • Emmanuel Olusegun STOBER

    (Academy of Economic Studies, 6 Piata Romana, Bucharest, Romania)

Abstract

The decision to have children nowadays is largely a matter of choice; this has led researchers to model fertility in economic terms. This paper links the demographic effects to the labor market characteristics and consequently to the national economy. It shows that the situation in the Romanian economy is characterized by a steadily declining share of the working age population, a rising share of the elderly and a decreasing share of the young. Therefore if the downward demographic trend should continue, there will only be 15.6 million people left in Romania in 2060 with only 2 million labor force participants. The burden of financing 8 dependents will fall on one labor force participant, thus, the rising old-age dependency ratios will translate into growing tax burdens. The generous pension and health care benefits will crowd out public investment in infrastructure or education, with negative effects on capital accumulation and productivity growth.

Suggested Citation

  • Emmanuel Olusegun STOBER, 2015. "Aging Population-A Cloud On Romania’S Economic Future," Management Research and Practice, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 7(4), pages 32-42, December.
    • Handle: RePEc:rom:mrpase:v:7:y:2015:i:4:p:32-42
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    File URL: https://mrp.ase.ro/no74/f3.pdf
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    References listed on IDEAS

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