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Pension Policy and Population Ageing

Author

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  • Gurvich, E.

    (Economic Expert Group, Moscow, Russia
    Financial Research Institute, Moscow, Russia)

Abstract

We are demonstrating that retirement age increase that started in Russia in 2019 was an inevitable implication of adverse demographic trends combined with the policy of keeping constant ratio of average pension to average wage, pursued by the government in 2010s. More general 'Pension Trilemma' is proposed which states that if number of pensioners per employee is rising there is no way to keep fixed pension benefit to wage ratio and retain pension system sustainability. Higher retirement age is acceptable as an increase in life expectancy (the major cause of population ageing) when it is accompanied with proportional growth of the 'healthy life expectancy' which is in a sense proxy for the age of incapacity for work. New indicators of ageing are defined as average numbers of years spent by members of a particular cohort in a working age and in retirement. We demonstrate that their ratio is rapidly shifting in Russia towards retirement period starting mid-2000s.

Suggested Citation

  • Gurvich, E., 2019. "Pension Policy and Population Ageing," Journal of the New Economic Association, New Economic Association, vol. 42(2), pages 177-186.
    • Handle: RePEc:nea:journl:y:2019:i:42:p:177-186
    DOI: 10.31737/2221-2264-2019-42-2-10
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    References listed on IDEAS

    as
    1. Peter Diamond & Nicholas Barr, 2006. "(UBS Pensions Series 041) The Economics of Pensions," FMG Discussion Papers dp563, Financial Markets Group.
    2. Evsey T. Gurvich & Maria A. Ivanova, 2018. "Economic Effect of Population Ageing and Pension Reforms," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 5, pages 9-22, October.
    3. Nicholas Barr & Peter Diamond, 2006. "The Economics of Pensions," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 22(1), pages 15-39, Spring.
    4. Jan Bonenkamp & Lex Meijdam & Eduard Ponds & Ed Westerhout, 2017. "Ageing-driven pension reforms," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(3), pages 953-976, July.
    5. A. Vishnevsky & S. Vasin & A. Ramonov., 2012. "Retirement Age and Life Expectancy in the Russian Federation," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 9.
    6. A. Kudrin & E. Gurvich., 2012. "Population Aging and Risks of Budget Crisis," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 3.
    7. Jorge Martinez-Vazquez & Mark Rider & Riatu Qibthiyyah & Sally Wallace, 2006. "Who Bears the Burden of Taxes on Labor Income in Russia?," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0621, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
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    Cited by:

    1. V. A. Gurtov & E. A. Pitukhin, 2020. "The Impact of Pension Reform on the Forecasted Employed Population in the Regions of the Arctic and the Far East," Studies on Russian Economic Development, Springer, vol. 31(4), pages 411-420, July.

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    More about this item

    Keywords

    pension reform; retirement age; population ageing;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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