Demographics, Labour Market, and Pension Sustainability in Hungary

Németh, András Olivér, Németh, Petra and Vékás, Péter ORCID: (2020) Demographics, Labour Market, and Pension Sustainability in Hungary. Society and Economy, 42 (2). pp. 146-171. DOI

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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 fi elds 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.

Item Type:Article
Uncontrolled Keywords:pensions, sustainability, demography, employment, dependency ratio
JEL classification:H55 - Social Security and Public Pensions
J11 - Demographic Trends, Macroeconomic Effects and Forecasts
J21 - Labor Force and Employment, Size and Structure
Subjects:Economic development
Economic policy
ID Code:6143
Deposited By: Veronika Vitéz
Deposited On:04 Dec 2020 11:23
Last Modified:11 May 2021 12:39

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