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Demographic ageing and public debt in Poland. Is the public finance sector about to collapse?

Author

Listed:
  • Marek Piotrowski

    (University of Warmia and Mazury in Olsztyn, Poland)

  • Magdalena Antoń

    (University of Warmia and Mazury in Olsztyn, Poland)

  • Emilia Kwiatkowska

    (Regional Territorial Observatory at the Spatial Planning Office of the Lodz Voivodeship, Poland)

Abstract

The paper addresses the issue of demographic ageing of the Polish population, with particular emphasis on its impact on the functioning of the national economy. Its main objective was to assess the influence of demographic changes on the public finance sector in Poland. To achieve the main objective of assessing the impact of demographic aging on Poland's public finance sector, a study of correlation and periodic change dynamics was conducted, covering the period from 2000 to 2022. Additionally, a regression analysis was performed using the Classical Least Squares Method. In the research part of the paper, changes in the age structure in Poland are characterized, and the impact of this phenomenon on the economic situation of elderly persons is assessed. Using an econometric model, the impact of factors related to demographic changes, such as natural population growth and the demographic dependency ratio on the post-working-age population, on the value of the state's public debt was assessed. Based on the model, an attempt was made to forecast this variable for the years 2023-2026. The analyses revealed that the consequences of demographic ageing threaten the stability of the public finance sector. The study showed that with a 95% probability, a decrease in natural population growth by 1000 individuals leads to an increase in debt by 0.81 billion PLN, and an increase in the demographic dependency ratio on the post-working-age population results in an increase in public debt by 19.71 billion PLN, with other conditions unchanged. Furthermore, the prediction confirmed that, under the conditions of the values of explanatory variables forecasted by the Central Statistical Office, its value in 2026 will increase by 0.38% compared to 2022.

Suggested Citation

  • Marek Piotrowski & Magdalena Antoń & Emilia Kwiatkowska, 2025. "Demographic ageing and public debt in Poland. Is the public finance sector about to collapse?," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 12(3), pages 286-303, March.
    • Handle: RePEc:ssi:jouesi:v:12:y:2025:i:3:p:286-303
    DOI: 10.9770/c5989647484
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    References listed on IDEAS

    as
    1. Christophe André & Peter Gal & Matthias Schief, 2024. "Enhancing productivity and growth in an ageing society: Key mechanisms and policy options," OECD Economics Department Working Papers 1807, OECD Publishing.
    2. 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.
    3. Phillip King & Harriet Jackson, "undated". "Public Finance Implications of Population Ageing," Working Papers-Department of Finance Canada 2000-08, Department of Finance Canada.
    4. George Hondroyiannis & Evangelia Papapetrou, 2000. "Do Demographic Changes Affect Fiscal Developments?," Public Finance Review, , vol. 28(5), pages 468-488, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    demographic ageing; public finance sector; public debt;
    All these keywords.

    JEL classification:

    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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