Pension Reform and the Long-Term Labour Force Projections in Serbia : The Application of the Cohort-Simulation Model

Vladisavljević, Marko and Lebedinski, Lara (2018) Pension Reform and the Long-Term Labour Force Projections in Serbia : The Application of the Cohort-Simulation Model. In: Finance and Insurance Sector Industry. Silver and Smith Publishers, London, pp. 53-75. ISBN 978-1-9993029-1-7

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Abstract

In 2014 the Government of Serbia has adopted a law that postponed both the minimum age for early retirement for men and women and the minimum age for old-age retirement for women. The measures were introduced in order to address high inactivity of the elderly, especially among women, while, at the same time, addressing the problem of the increasingly aging population and heavily burdened pension system. We use the Cohort Simulation Model and the Labour Force Survey data to investigate the medium- and long-term effects of the retirement reform on the projected activity rate of men and women in Serbia,. The results indicate that the activity rate of older workers would increase by 1.9 percentage points by 2026 and by 3.9 percentage points by 2060 even without the introduction of the pension reform, merely as the result in the activity trends. On the other hand, the introduction of the pension reform increases the activity rate by additional 2.2 percentage points in 2026 and by 2.9 percentage points in 2060. Additionally, the results suggest that the large gender gap in the activity rates will be significantly reduced. However, the growth of the activity rate suggests that the Europe 2020 target of 75% 20-64 activity rate will be reached in Serbia only in 2060.

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