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Demographic pressures and the sustainability of social security in Emerging Europe and Central Asia

Author

Listed:
  • Jaromir Cekota

    () (United Nations Economic Commission for Europe)

  • Claudia Trentini

    () (United Nations Economic Commission for Europe)

Abstract

This paper investigates the long-term effects of population ageing in a number of ECE emerging market economies. The latest revision of the UN World Population Prospects implies that all of the countries of Eastern Europe, Caucasus and Central Asia (EECCA) and South-Eastern Europe (SEE) will experience population ageing over the period 2010-2050. In most of them, the ageing process will be associated with rising dependency ratios as the share of the working-age groups in the total population shrinks. In these economies, the combination of an ageing and declining population is likely to reduce the effective labor supply, threatening to undermine the sustainability of their public pension and health systems. The analysis of available demographic and economic data confirms the severity of the demographic crisis' consequences for fiscal sustainability. Further, the results provide compelling evidence on the necessity for most of the countries in the region to undergo wide reaching policy reforms with a particular focus on pension systems and labor markets. Ageing is one of the significant cost factors, but not the only one, that will impact health spending in SEE and EECCA countries. The public health sector needs to be reformed with a view to increasing its efficiency.

Suggested Citation

  • Jaromir Cekota & Claudia Trentini, 2012. "Demographic pressures and the sustainability of social security in Emerging Europe and Central Asia," ECE Discussion Papers Series 2012_2, UNECE.
  • Handle: RePEc:ece:dispap:2012_2
    as

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    File URL: http://www.unece.org/fileadmin/DAM/oes/disc_papers/ECE_DP_2012-2.pdf
    File Function: First version, 2012
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    References listed on IDEAS

    as
    1. Katerina Lisenkova, 2011. "Pension reform in a rapidly ageing country: the case of Ukraine," Working Papers 1126, University of Strathclyde Business School, Department of Economics.
    2. World Bank, 2009. "Pensions in Crisis : Europe and Central Asia Regional Policy Note," World Bank Other Operational Studies 18728, The World Bank.
    3. Robert Shelburne & Claudia Trentini, 2009. "Public Health in Europe: The 2007-2009 Financial Crisis and UNECE Activities," ECE Discussion Papers Series 2009_2, UNECE.
    4. Alexander Chubrik & Roman Mogilevsky & Irina Sinitsina & Marek Dabrowski, 2011. "The Impact of the Global Financial Crisis on Public Expenditures on Education and Health in the Economies of the Former Soviet Union," CASE Network Reports 0100, CASE-Center for Social and Economic Research.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    aeging; social security; health; welfare; labor force; transition;

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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