A young EU member’s ageing: budgetary and macroeconomic consequences of Slovenia’s demographic prospects

Weyerstrass, Klaus and Neck, Reinhard (2013) A young EU member’s ageing: budgetary and macroeconomic consequences of Slovenia’s demographic prospects. Empirica, 40 (3), pp. 427-456.

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Abstract or Table of Contents

In this paper, we simulate a macroeconometric model of Slovenia over the period 2012–2060, using the projected demographic development as input, and determine time paths for budgetary and macroeconomic variables under alternative assumptions about Slovenian policy instruments so as to limit budgetary pressures stemming from population ageing. The main macroeconomic indicators (growth, employment, price stability, sustainable public finances) are shown to depend on the assumed long-run policy options followed. It is demonstrated that the ageing of the Slovenian population projected in the demographic forecast leads to severe budgetary problems unless increases of the retirement age, rising social security contributions or reductions of state financed pensions are implemented. A reduction of the pension replacement rate turns out to be the most effective measure to cope with the budgetary implications of population ageing. However, none of the analysed policy measures is sufficient to stabilise the debt ratio.

Item Type: Article in Academic Journal
Keywords: Macroeconomics, Fiscal policy, Ageing, Slovenia, Pension economics, Public debt
Classification Codes (e.g. JEL): E17, E37, H63
Status: Published
Date Deposited: 12 Jun 2015 08:18
Last Modified: 01 Apr 2016 14:20
URI: http://irihs.ihs.ac.at/id/eprint/3551

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