Effects of population ageing on the pension system in Belarus

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Lisenkova, Katerina and Bornukova, Kateryna (2017) Effects of population ageing on the pension system in Belarus. Baltic Journal of Economics, 17 (2). pp. 103-118. ISSN 2334-4385 (https://doi.org/10.1080/1406099X.2017.1318000)

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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.

ORCID iDs

Lisenkova, Katerina ORCID logoORCID: https://orcid.org/0000-0003-0264-9797 and Bornukova, Kateryna;
CORE (COnnecting REpositories)