Page 9 - Tallinna Ülikool

ThevalUe
OfShaRe
for an aging estonia
Axel Börsch-Supan
Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy, Munich, Germany; Department of Economics and Business, Technical University of Munich (TUM), Munich, Germany; National Bureau of Economic Research (NBER), Cambridge, Mass., USA.
Population ageing and its social and economic challenges to growth and prosperity are among the most pressing challenges of the 21st century in Europe, as repeatedly empha- sised by the European Commission, the Council and the European Parliament.
is development does not spare Estonia. In fact, Estonia has been among the most vulnerable countries in the world to an unprecedented pace of ageing population in
the beginning of the 21st century that might have an e ect on economic growth over
the next 20 years. Estonia and the other two Baltic states will face greater challenges in providing for their older populations because their aged population faces challenges in the social sphere owing to their per capita GDPs being much lower than the Eu average, which in the long term adds to scal pressures. While the Estonian government has implemented a range of pension reforms to o set the scal pressures of this ageing trend, social security funds are still not on a sustainable footing.
Estonia’s scal prudence, higher share of value-added exports and closer links with Nordic economies underpin its stronger ability to repay creditors and warrants country ratings higher than its Baltic peers. At the same time, however, estonian pensioners are among the poorest in oeCD countries. At the same time life expectancy in Estonia has rapidly increased but remains lower than the population in neighbouring Sweden and Finland by about 2 years.