Demographics, Labour Market, and Pension Sustainability in Hungary
Demographics, Labour Market, and Pension Sustainability in Hungary
Author(s): András Olivér Németh, Petra Németh, Péter VékásSubject(s): National Economy, Socio-Economic Research
Published by: Akadémiai Kiadó
Keywords: pensions; sustainability; demography; employment; dependency ratio
Summary/Abstract: The sustainability of an unfunded pension system depends highly on demographic and labour market trends, i.e. how fertility, mortality, and employment rates change. In this paper we provide a brief summary of recent developments in these fields in Hungary and draw up a picture of the current situation. Then, we forecast the path of the economic old-age dependency ratio, i.e. the ratio of the elderly and employed populations. We make different alternative assumptions about fertility, mortality, and employment rates. According to our baseline scenario the dependency ratio is expected to rise from 40.6% to 77% by 2050. Such a sharp increase makes policy intervention inevitable. Based on our sensitivity analysis, the only viable remedy is increasing the retirement age.
Journal: Society and Economy. In Central and Eastern Europe ǀ Journal of the Corvinus University of Budapest
- Issue Year: 42/2020
- Issue No: 2
- Page Range: 146-171
- Page Count: 26
- Language: Hungarian