Aging and Pension Systems

Abstract

This chapter studies the impact of the Covid-19 pandemic on aging and pension systems within the Emerging European Economies (EEE). In the first part, it presents stylized facts from recent decades. The most important findings are that (1) the total fertility rate in the EEE is around 1.5 and is only slowly increasing; (2) life expectancies at 65 differ within the EEE and still lag with respect to older EU members; and (3) a mandatory private pillar was established between 1998-2010 in most members of the EEE, but from 2011 they were cut back and sometimes eliminated.

In the second part, we study the impact of the Covid-19 pandemic on pension systems. This can be important as changes in the age structure of the population strongly influence economic developments, as well as modern pension systems. We find that the per capita number of victims varies in the EEE between very high and average, which leads to a temporary drop in life expectancy and GDP. However, as the increase in mortality is likely to be temporary, the financial impact of the pandemic on pension systems in the EEE is quantitatively small. Nevertheless, it might still lead to important pension-related policy changes.