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The Inverting Pyramid : Pension Systems Facing Demographic Challenges in Europe and Central Asia

Author

Listed:
  • Anita M. Schwarz
  • Omar S. Arias
  • Asta Zviniene
  • Heinz P. Rudolph
  • Sebastian Eckardt
  • Johannes Koettl
  • Herwig Immervoll
  • Miglena Abels
Abstract
Pension systems in Europe and Central Asia are facing unprecedented demographic change. While many of the countries in the region have undertaken reforms when the economy faces difficult times, these reforms are frequently reversed when the economy improves. The demographic challenges that the region faces require a sustained effort toward changing the pension system toward something which provides adequate and sustainable benefits. The book documents the increased generosity of pension systems in Europe from their initial inception, noting that the current expectations of the public are based on the most recent round of generosity. The book seeks to show a nontechnical audience that such generosity is neither based on customary practice nor affordable in the future. The increased generosity in the past was only possible because the demographic pyramid was expanding, but as it inverts with fewer young people and more elderly, that generosity will no longer be affordable. Returning to the pension system of the 1970’s will go a long way toward providing adequate and sustainable benefits in the future. Moving to a more sustainable system will require reforms to labor markets, improvements in savings mechanisms, and may require additional public resources. The extent to which a country can undertake reforms in labor markets, savings, and public finances can influence the extent to which its pension system will have to change, with different solutions possible for different countries. But in all cases, the changes that need to be made have to be widely discussed and publicly accepted to prevent reversals. The book hopes to stimulate widespread public discussion of the issue to help countries make sustainable choices with gradual implementation, before they face such daunting challenges that they have to undertake sudden, harsh measures.

Suggested Citation

  • Anita M. Schwarz & Omar S. Arias & Asta Zviniene & Heinz P. Rudolph & Sebastian Eckardt & Johannes Koettl & Herwig Immervoll & Miglena Abels, 2014. "The Inverting Pyramid : Pension Systems Facing Demographic Challenges in Europe and Central Asia," World Bank Publications - Books, The World Bank Group, number 17049.
    • Handle: RePEc:wbk:wbpubs:17049
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    References listed on IDEAS

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    1. Pallares-Miralles, Montserrat & Romero, Carolina & Whitehouse, Edward, 2012. "International patterns of pension provision II : a worldwide overview of facts and figures," Social Protection Discussion Papers and Notes 70319, The World Bank.
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    Cited by:

    1. Victoria Levin, 2015. "Promoting Active Aging in Russia," World Bank Publications - Reports 22613, The World Bank Group.
    2. Balteș Nicolae & Dumiter Florin & David Delia & Jimon Ștefania, 2018. "Trends Regarding the Evolution of the Romanian Pension System," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 28(1), pages 1-16, March.
    3. Krzysztof Makarski & Joanna Tyrowicz, 2015. "Political (In)Stability of Social Security Reform," Working Papers 2015-21, Faculty of Economic Sciences, University of Warsaw.
    4. Marhanum Che Mohd Salleh & Mohammad Abdul Matin Chowdhury & Siti Salwani Razali & Nan Nurhidayu Megat Laksana, 2020. "Retirement Schemes, its Challenges and Ways of Reformation: A Cross-Border Study," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 10(9), pages 507-520, September.
    5. World Bank, 2015. "Searching for a New Silver Age in Russia," World Bank Publications - Reports 22611, The World Bank Group.
    6. Frassi, Benedetta & Gnecco, Giorgio & Pammolli, Fabio & Wen, Xue, 2019. "Intragenerational redistribution in a funded pension system," Journal of Pension Economics and Finance, Cambridge University Press, vol. 18(2), pages 271-303, April.
    7. Beetsma, Roel & Komada, Oliwia & Makarski, Krzysztof & Tyrowicz, Joanna, 2021. "The political (in)stability of funded social security," Journal of Economic Dynamics and Control, Elsevier, vol. 133(C).
    8. World Bank Group, 2015. "Serbia Public Finance Review," World Bank Publications - Reports 22675, The World Bank Group.
    9. World Bank, 2015. "Promoting Labor Market Participation and Social Inclusion in Europe and Central Asia's Poorest Countries," World Bank Publications - Reports 22501, The World Bank Group.
    10. Schotte,Simone Raphaela & Winkler,Hernan Jorge, 2016. "Why are the elderly more averse to immigration when they are more likely to benefit ? evidence across countries," Policy Research Working Paper Series 7554, The World Bank.
    11. Magda Malec, 2017. "Redystrybucja wewnątrzpokoleniowa w systemie emerytalnym," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 4, pages 63-81.
    12. World Bank Group, 2015. "Republic of Serbia Public Finance Review 2015," World Bank Publications - Reports 24274, The World Bank Group.
    13. Ben Slay & Tahmina Anvarova, 2019. "Inequalities in middle-income Europe and Central Asia: A tale of three studies," Russian Journal of Economics, ARPHA Platform, vol. 5(4), pages 441-448, December.
    14. World Bank, 2015. "Labor Market Inequalities in FYR Macedonia," World Bank Publications - Reports 22495, The World Bank Group.
    15. Soren Nellemann & Oleg Podolskiy & Victoria Levin, 2015. "State of Adult Education in Russia," World Bank Publications - Reports 22612, The World Bank Group.
    16. Maurizio Bussolo & Johannes Koettl & Emily Sinnott, 2015. "Golden Aging," World Bank Publications - Books, The World Bank Group, number 22018.
    17. Dmitry Nazarov & Aliya Bayakhmetova & Lyazzat Bayakhmetova & Leila Bayakhmetova, 2022. "A Model for Assessing the Causality of Factors in the Development of Voluntary Pension Insurance in the Republic of Kazakhstan," Mathematics, MDPI, vol. 10(9), pages 1-19, April.

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