IGOR EFREMOV ON THE BOUNDARY BETWEEN THE "OLD AGE THRESHOLD" AND RETIREMENT AGE

Population ageing has a negative impact on the economy, but existing estimates of this impact are based on a fixed age of "onset of old age". Alternative indicators of aging imply that the scale of the negative effect may be much smaller, informs the analytical portal "Econs".

Western studies have demonstrated that an aging population in the US could reduce annual economic growth by 30% in the period from 2020-2030, and in the Eurozone from 2020-2050 - to virtually zero. However, such estimations are usually based on the share of people over 60 or 65, i.e. on the biological age of "disability".

There is an alternative approach that defines the "old age threshold" as the age when life expectancy does not exceed 15 years. Estimates of the impact of aging on the economy based on this alternative approach show that at least half of the slowdown in economic growth due to aging calculated using the old methods can be avoided. The bottom line is that for the average person on the planet who reached age 65 in 1950 life expectancy was 11 years, while for the same age in 2022 it is about 17 years. That is, the "old age threshold" is different for the two generations. Today's elderly people are actually "younger" than their peers of the last century. Another example: in the United States, the "old age threshold" was exactly 65 years in 1970, and in 2019 this age went up to 72 years. During the pandemic, the indicator declined, but then increased again.

According to the UN, in Russia in 2019, before the outbreak of the pandemic, the "old age threshold" was 67 years for both sexes: 69 years for women and 62 years for men. In 2022, this figure dropped to 64 years for both sexes, with 67 years for women and 59 years for men. It is important to note that these values are calculated on the basis of data on the 2021 pandemic. Indeed, based on the gradual increase in the retirement age in Russia, in 2021 and 2022 it is set at 56.5 years for women and 61.5 years for men. It is worth noting that in 2028 the retirement age for women should reach 60 years in Russia, and for men - 65 years.

Igor Efremov admitted that the 2022 data were affected by the pandemic, but now life expectancy at older ages should "at least return to pre-pandemic levels or even slightly surpass them."

"Thus, we can assume that now, in 2023, the "old age threshold" in Russia is approximately equal to 67.5 years for both sexes, it is 63 years for men and 69-70 years for women," the expert said. "'To use the so-called 'old age threshold' instead of the current stable retirement age is a very correct idea, Igor Efremov believes. - It allows to take into account the progress in reducing mortality in older ages. And in some rare cases, its regression, if necessary."

As a result, as Efremov summarizes, from a demographic point of view it would be fairer to make the retirement age dependent on healthy life expectancy with soft criteria for the boundary of the beginning of "unhealthy" life. "In this case, for Russia, this boundary will be approximately at the age of 61-62 for both sexes and will gradually increase in the future as the health of elderly Russians improves and their mortality rate decreases," the expert explained.

Also, he said, attention should be paid to the fact that the pension system in Russia is solidarity-based, i.e. pensions for today's pensioners are paid from the contributions of those Russians who are still working and whose old age is still ahead of them. "Given the age structure, low birth rate and rapid aging of the population in Russia, it is quite obvious that in addition to the current pay-as-you-go system (solidarity between generations), it is necessary to include a cumulative element," Igor Efremov said. However, in his opinion, within the framework of the pension solidarity of generations, it is also possible to adjust pensions in such a way that a small share of pension contributions of working Russians is added to the pension of their parents.