From red to gray : the third transition of aging populations in Eastern Europe and the former Soviet Union PDF
Preview From red to gray : the third transition of aging populations in Eastern Europe and the former Soviet Union
IBRD3419SRAPRIL2007 ThisreportispartofaseriesundertakenbytheEuropeandCentralAsiaRegionoftheWorldBank. Theseriescoversthefollowingcountries: Albania Lithuania Armenia Moldova Azerbaijan Montenegro Belarus Poland BosniaandHerzegovina Romania Bulgaria RussianFederation Croatia Serbia CzechRepublic SlovakRepublic Estonia Slovenia FYRMacedonia Tajikistan Georgia Turkey Hungary Turkmenistan Kazakhstan Ukraine KyrgyzRepublic Uzbekistan Latvia 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. —— ©18210807HTShtereeItntNerWnationalBankforReconstructionandDevelopment/TheWorldBank WashingtonDC20433 Telephone:202-473-1000 Internet:www.worldbank.org E-mail:[email protected] Allrightsreserved 123410090807 ThisvolumeisaproductofthestaffoftheInternationalBankforReconstructionandDevelopment/ TheWorldBank.Thefindings,interpretations,andconclusionsexpressedinthisvolumedonot necessarilyreflecttheviewsoftheExecutiveDirectorsofTheWorldBankorthegovernmentsthey represent. TheWorldBankdoesnotguaranteetheaccuracyofthedataincludedinthiswork.Theboundaries, colors,denominations,andotherinformationshownonanymapinthisworkdonotimplyanyjudge- mentonthepartofTheWorldBankconcerningthelegalstatusofanyterritoryortheendorsementor acceptanceofsuchboundaries. RightsandPermissions Thematerialinthispublicationiscopyrighted.Copyingand/ortransmittingportionsorallofthiswork withoutpermissionmaybeaviolationofapplicablelaw.TheInternationalBankforReconstruction andDevelopment/TheWorldBankencouragesdisseminationofitsworkandwillnormallygrant permissiontoreproduceportionsoftheworkpromptly. infFoorrmapteiromnistsoitohnetCoopphyoritgohctopCyleoarrarenpcreinCtenatneyrpIanrct.,of22t2hisRowosrekw,oopldeaDsreivse,enDdanavreerqsu,esMtAwi0t1h92c3o,mpUlSeAt;e telephone:978-750-8400;fax:978-750-4470;Internet:www.copyright.com. Allotherqueriesonrightsandlicenses,includingsubsidiaryrights,shouldbeaddressedtothe OfficeofthePublisher,TheWorldBank,1818HStreetNW,Washington,DC20433,USA; fax:202-522-2422;e-mail:[email protected]. 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 ':r"1
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