Pension reform: a study of the impact of demographic processes on changes in the labor market and the social sphere

Abstract

Today, one of the main challenges faced by developed economies is demographic aging, due to a decrease in the birth rate while increasing the life expectancy of the population. The most popular measure to overcome this crisis is, as a rule, a pension reform, designed to reduce the financial burden on the state budget by increasing the retirement age. A number of countries have already gone through or are going through this process. This paper examines the prerequisites for the pension reform being implemented today in Russia, analyzes the trends of ongoing changes and evaluates some of the results achieved. Based on the results of the study, it was determined that it was impossible to avoid changes, despite their unpopularity. Contrary to the arguments given at the stage of reform implementation, the increase in the retirement age has not yet had a positive impact on the labor market, and on the level of pension provision, in general, too. Since the main share in the structure of monetary incomes of the population is occupied by income from labor activity and pension payments, the issues of providing them at a sufficient level are quite acute, as, indeed, are the problems of balancing the budget of the Pension Fund. Today’s pensions are too small to provide an acceptable standard of living. At the same time, for the introduction of a funded system that could supplement the distribution system and increase the level of pension payments, the Russian Federation does not have the necessary conditions, while the distribution system has almost exhausted itself. Only with the help of indexation of pensions can the problem be solved only temporarily; in the long term, other solutions must be sought.