Abstract
Belarus currently has a relatively generous pay-as-you-go pension system, but population aging coupled with recent problems with economic growth will soon make it unsustainable. We build a rich overlapping generation model of Belarusian economy, which shows that without reform the Pension Fund will run into persistent and growing deficit, which will reach 9% of GDP by 2055. We also compute the fiscal projections of several parametric pension reforms, including the reform which will start in 2017. To avoid a deficit without reform, pension benefits would have to be substantially reduced. The increase of retirement age to 65 for both genders has a strong positive effect on sustainability of the pension system and keeps the deficit below 2% of GDP.
Original language | English |
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Pages (from-to) | 103-118 |
Number of pages | 16 |
Journal | Baltic Journal of Economics |
Volume | 17 |
Issue number | 2 |
Early online date | 4 May 2017 |
DOIs | |
Publication status | E-pub ahead of print - 4 May 2017 |
Keywords
- Belarus
- demography
- pension reform
- pension system
- retirement age