From red to gray : the third transition of aging populations in Eastern Europe and the former Soviet Union

2007·14 MB·English

by  Chawla, Mukesh

IBRD3419SRAPRIL2007
ThisreportispartofaseriesundertakenbytheEuropeandCentralAsiaRegionoftheWorldBank.
Theseriescoversthefollowingcountries:
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Bulgaria RussianFederation
Croatia Serbia
CzechRepublic SlovakRepublic
Estonia Slovenia
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FROM RED TO GRAY

FROM RED TO GRAY
The "Third Transition" of
Aging Populations in
Eastern Europe and
theformer Soviet Union
MukeshChawla
GordonBetcherman
ArupBanerji
withAnneM.Bakilana,
CsabaFeher,
MichaelMertaugh,
MariaLauraSanchezPuerta,
AnitaM.Schwartz,
LarsSondergaard,
andAndrewBurns
I IT)11
THEWORLDBANK
Washington,D.C.
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ISBN-10:0-8213-7129-0
ISBN-13:978-0-8213-7129-9
eISBN-10:0-8213-7130-4
eISBN-13:978-0-8213-7130-5
DOI:10.1596/978-0-8213-7129-9
Coverphoto:TimDirven/Panos
Coverdesign:NaylorDesign,Washington,D.C.
LibraryofCongressCataloging-in-PublicationData
Chawla,Mukesh.
Fromredtogray:thethirdtransitionofagingpopulationsinEasternEuropeandtheformer
SovietUnion/byMukeshChawla,GordonBetcherman,andArupBanerji.
p.cm.
Includesbibliographicalreferencesandindex.
ISBN978-0-8213—-7129-9(alk.pap—er)—ISBN978-0-8213-7130-5 —
1.Olderpeople Europe,Eastern Economic—conditions. 2.Olderpeople SovietUnion
Economicconditions. 3.Populationforecasting Europe,Eastern. 4.Populationforecasting
SovietUnion. I.Betcherman,Gordon. II.Banerji,Arup. III.Title.
HQ1064.E812C452007
304.6'20947—dc22 2007014701
Contents
Foreword xix
Acknowledgments xxiii
Abbreviations xxv
Overview 1
Introduction 1
RedtoGray:AUniqueDemographicTransition 4
RedLighttoGreenLight:GrowingOlderDoes
NotHavetoMeanGrowingSlower 13
RedInktoBlackInk:WagingSensiblePolicies
CanEaseAging'sSpendingImpact 21
CompletingandBuildingontheTransitions:
TheDifferentPathsAhead 39
Notes 43
1. TheDemographicTransitioninEasternEurope
andtheFormerSovietUnion 45
Introduction 45
TheGlobalDemographicTransition 46
TheDemographicTransitioninEasternEurope
andtheFormerSovietUnion, 1950-2000 49
71
vi Contents
DemographicProjectionsto2025 55
PopulationChangeandDependencyRates 65
TwoDistinctDemographicProfiles:OldCountries
andYoungCountries 68
Conclusion 70
Notes 72
2. DemographicChangeandLaborMarkets 73
Introduction 73
LaborForceProjections 74
ImplicationsofanAgingLaborForceforLabor
MarketOutcomes 86
AgingandLaborProductivity 95
PolicyImplications 102
Annex2.A:ILOLaborForceProjection
Methodologies 105
Annex2.B:LaborForceParticipationProjections,
2005-20 107
Annex2.C:ChangesinWorking-AgePopulation 110
Annex2.D:ParticipationRatesinCountries
oftheRegion 11
Notes 114
3. Aging,Savings,andFinancialMarkets 117
Introduction 11
AgingandSavingBehavior 118
AgingandFinancialMarkets 131
PolicyImplications 144
Annex3.A:GrossDomesticSavingsinEastern
EuropeanandFormerSovietCountries 146
Annex3.B:SelectedFinancialSectorIndicators 147
Notes 149
4. AgingandPensionExpenditures 151
Introduction 151
CurrentPensionSystemsinCountriesof
theRegion 152
ProjectedImpactofAgingonPensionSpending 157
ProspectsforFurtherParametricReform 163
ReformOptions 166
Notes 175
Contents vii
5. Aging,Long-TermCare,andPublicExpenditures 177
Introduction 177
AgingandHealthExpenditures 179
ProjectionsofPublicExpendituresonHealth 182
Long-TermCare 191
PolicyImplications 199
Annex5.A:LegislationonLong-TermCare
inEurope 207
Annex5.B:GrossDomesticProduct
andPublicExpendituresonHealth 207
Annex5.C:ElderlyDependentPopulation 207
Annex5.D:SensitivityofProjectionResults
toDataAssumptions 210
Notes 216
6. AgingandEducation 217
Introduction 217
HowEducationSystemsHaveChanged
SinceTransition 220
ImpactofProjectedDemographicChanges
onEnrollments 234
ImprovedProductivitythroughBetter
EducationSystems 242
PolicyImplications 248
Annex6.A:AgingandEducation:DataTables 251
Notes 259
References 263
Boxes
O.l DemographicProjections 6
0.2 PronatalistPoliciesinEurope 9
1.1 KeyDefinitionsinDemography 47
1.2 FertilityDeclinesandImprovementin
LongevityinSelectedCountries,
1950-2000 50
1.3 DemographicProjections 56
2.1 HowDoesProductivityChangewithAge
forDifferentTasks? 97
2.2 WhatDoWageTrendsTellUsabout
HowProductivityChangeswithAge? 98
2.3 ComputingReturnstoEducation 101
3
viii Contents
3.1 DefinitionsofSavingTerms 120
3.2 WhenCanAgingLeadtoGreaterSavings? 121
3.3 WhatRoleDoesCross-BorderCapital
MobilityHaveinFinancialMarkets? 132
3.4 KeyPensionFundConcepts 137
3.5 AgingandAssetMeltdown 142
4.1 GlossaryofPensionTerms 153
6.1 HowAreEducationSystemsImplicated
intheProcessofDemographicChange? 219
6.2 ReformsNeededinEducationSystems 227
6.3 FundamentalProblemswithCurrent
FinancingFormulas 230
Figures
O.l TheRegion'sDifferentMixesofDemographic
andEconomicTransition 4
0.2 MostCountriesintheRegionWillHave
SignificantPopulationDecreasesBetween
2000and2025 7
0.3 TheProportionofPopulationAged65+Will
beMuchHigherby2025 7
0.4 CountriesFaceDifferentMixesofDemographic
andEconomicTransition 1
0.5 IntheRegion,LaborProductivityHasHad
aStrongerImpactonGrowthThanAging
(1998-2005) 14
0.6 FinancialMarketsinEventheMoreDeveloped
EconomiesoftheRegionareShallowerThan
ThoseinOtherOECDCountries 21
0.7 PensionSpendingWouldRiseSignificantly
BecauseoftheAgingEffect,ButCanBe
ModeratedbyReforms... 23
0.8 ...Indeed,inSomeCountries,PensionReforms
AlreadyUndertakenWillModeratetheImpact
ofAging 24
0.9 RetirementAgesAreLowerintheRegionThan
inHigher-IncomeCountries 26
O.10 ModestSocialPensionsWouldGenerally
beAffordable 29
O.l1 PublicHealthCareCostsAreLikelytoRiseOnly
SlightlyinMostAgingCountriesintheRegion
by2020 31
O.l2 School-AgePopulationsWillShrinkinAll
CountriesExceptTajikistan... 35
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