Effects of population ageing on the pension system in Belarus

Katerina Lisenkova, Kateryna Bornukova

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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 languageEnglish
Pages (from-to)103-118
Number of pages16
JournalBaltic Journal of Economics
Volume17
Issue number2
Early online date4 May 2017
DOIs
Publication statusE-pub ahead of print - 4 May 2017

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Keywords

  • Belarus
  • demography
  • pension reform
  • pension system
  • retirement age

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