From Red to Gray: The ''Third Transition'' of Aging by Gordon Betcherman, Arup Banerji Mukesh Chawla

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By Gordon Betcherman, Arup Banerji Mukesh Chawla

Traditional knowledge holds that getting older populations are unfavourable for financial development as a result of their capability affects on exertions offer, productiveness, and reductions. while this is often coupled with the elevated spending pressures due to pension specifications and healthiness care, getting older societies are inclined to face severe financial difficulties. This document addresses those issues within the exact context of jap Europe and the previous Soviet Union the place many nations are getting older swiftly with out the commercial assets and institutional ability of different getting older societies in Western Europe and Japan.

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Additional info for From Red to Gray: The ''Third Transition'' of Aging Populations in Eastern Europe and the Former Soviet Union (World Bank Working Paper)

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Looking ahead, one finds that convergence toward Western European levels would imply that future saving in Eastern European and former Soviet countries should be more than what would be expected otherwise. 3). Although differences exist both within the region’s countries and within industrial countries, two additional features of saving in the former are particularly distinctive. First, foreign savings are crucial as a source of funds in most of the region’s countries, whereas they are largely unimportant in industrial countries.

Indexing Pensions after Retirement The second feature is the indexation of pensions after retirement. OECD countries have typically moved to inflation adjustment of pensions after retirement to minimize fiscal costs and maintain the pension’s purchasing power. But many countries in Eastern Europe and Central Asia still adjust pensions to some mix of inflation and wage growth. Moving to inflation indexation would bring them in line with international standards and provide savings to counter the impact of aging.

Third, if political resistance is overcome, intraregional migration from younger countries can augment the labor forces of the aging countries. 5 In the Region, Labor productivity Has Had a Stronger Impact on Growth Than Aging (1998–2005) 15 10 percent 5 0 Ϫ5 Ϫ10 GDP/employment working-age population/population employment/working-age population GDP/population y R ke FY Tu r ia, on ed ac M ec hR ep ub d lic c Cz bli lan Po ia Re ak ov Sl sia Ru s pu ia at en ov Sl Cr o nia a ma Ro M old ar ov y ria ng lga Hu us an ia Bu hu Lit nia gia lar to Be Es ine ra or Ge Uk a nia tvi ba La Al ion at nF ed er n Ar me n sta ija kh ba er za Ka Az nia Ϫ15 country Source: World Bank forthcoming a.

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