Assessing the Sustainability of Romanian Pension System

Abstract

Like all the European countries, Romania is confronted with an ageing population, driven by progress in life expectancy, low fertility and birth rates, and a ratio of the elderly-to-working age group that has already reached unprecedented levels and is projected to increase further. According to the National Institute of Statistics, the life expectancy at birth in Romania has increased from 70 years in 1990 to 74 years (70.3 years for men and 77.1 years for women) at present. The fertility rates in Romania went down from 2.3 births per woman in 1989 to 1.32 in 2008 and 1.33 in 2010, stagnating at this level for 12 years. Unfortunately, this level does not contribute to generations’ replacement, which requires 2.1 births per woman. The birth rate (which is usually the dominant factor in determining the rate of population growth) has declined in Romania from 13.7 % in 1990 to 9.58 % in 2010 and 9.55 % in 2011. The old age dependency ratio is also in a constant upward trend. Eurostat projections show that in 2060, with a value of 64.8, Romania is surpassed only by Latvia, which registers the maximum value of 68.0. Starting with 2050, this percentage is higher in Romania than in the EU 27. In addition, the external migration of young Romanians (especially temporary migration for work) is high—with major implications for the pension budget deficit. At present, there are not official statistical data concerning the number of Romanians Int Adv Econ Res (2012) 18:465–466 DOI 10.1007/s11294-012-9379-7