Strugling Imbalances
Impact of Demographic Trends
on Latvian Social Policy Making
Arvils Ašeradens
Parlamentary Secretary
Ministry of Welfare
1
According to EuroStat in 50 years
population in Latvia will be less then1.6 mil people
Age structure change
2011/2060
100+
95 - 99
90 - 94
male
female
85 - 89
80 - 84
75 - 79
70 - 74
65 - 69
60 - 64
2011
55 - 59
2060
50 - 54
45 - 49
40 - 44
35 - 39
30 - 34
25 - 29
20 - 24
15 - 19
10 - 14
5-9
0-4
120 000 100 000 80 000
60 000
40 000
20 000
0
20 000
40 000
60 000
80 000 100 000
2
Latvia - Census 2011,unpleasant surprise....
Natural growth rate
Migration ratio ?
Negative, How?
Number of inhabitants in Latvia during last two decades
has decreased dramaticaly:
290 th from 1989 – 2000 (11%)
309 th from 2000 – 2011 (13%)
4
PostCrisis
Latvia
Gross domestic
product:
2007-2011;
+11%, -5%, -18%,
-2%, +4.5%
Household debt:
2007-2011:
5.7 bil LVL
State budget deficit:
2009-2012
-6%, -3%, -2.5%, 0.8%
Outgoing migration:
2007-2011:
>200 000 inhabitants
Three most afected Social policy areas :
o Child and family policy
o Active employment policy
o Social insurance system
6
Child and family policy
Desperate fight for stable birth rate
2011 19/30
Natural growth in
Latvia 1988 -2010
45000
41275
41757
40000
35000
34200
33042
32710
32421
30040
30000
29897
23948
25000
21677
Number of
births
Number of
deaths
20000
20334
19219
19664
18410
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
15000
7
Top priority of Latvian government
Council of Demographic Affairs
•
Cabinet’s Regulations of 12 April 2011 No 293 “By-law of the Council of
Demographic Affairs”
•
Henceforth demographic matters shall be dealt with under direct
subordination of the Prime Minister, thus enabling that demographic
issues are solved in an integrated manner in all the involved branches, not
just only in a single ministry’s supervised fields of competence
•
The aim of the Council is to promote national demographic policy and its
implementation in all the levels of state administration
•
The basic composition of the Council is formed by the branch ministers,
nongovernmental organizations with which a good cooperation has been
developed and which possess certain level of competence related to
demographic issues, additionally such institutions have been included,
which have a significant role in the Council’s work, such as Parliament’s
Commission of Social and Labour Matters and Parliament’s
Commission of Human Rights and Public Matters, Commission of
Strategic Analysis, Employers' Confederation of Latvia, Latvian Association
of Free Trade Unions, NGOs representing families’ interests.
8
Employment policy
High unemployment
Basic reason of outgoing migration
Registred unemployment level at
State Employment agency (NVA)
200000
18
16
180000
16
14.3
14.5
14.5
14.4
160000
13.9
13.2
12.6
140000
14
12.1
11.8
11.6
12
120000
10
100000
7.4
8
7
6.5
80000
6
4.9
60000
4
164551
164880
163454
157857
149600
142428
137638
134175
131659
162463
179235
76435
52321
68944
20000
78482
40000
I
II
III
IV
V
VI
VII
VIII
IX
0
2
0
2005
2006
2007
2008
2009
2010
bezdarbnieku skaits
2011
bezdarba līmenis,%
Labour market
Three spheres of interaction
Industries
Labour force
Social Security Net
Education
System
Effective coordination of involved actors
Welfare
Ministry
•Labour market development
•Social security net
Life-long
Learnig
Education
Ministry
•Secondary schools
•Profesional education
•Universities
•Science
Business
Incubation
Inovation
•Bussines environment
•Industrial policy
Economy
Ministry
Employment
Policy
Employment policy chalenge 2015:
labour deficit
Dinamics of labour suplay and demand
age group 15-74 , th.
Labour supplyeconomicaly active population
Labour demandnumber of people employed
12
Social insurance system
Social budget deficit presure
13
Social insurance system
Social tax rate – 35,09%
(11% paid by employee, 24,09% by employer)
•
•
•
•
•
•
pension insurance 26,74%
insurance against unemployment 1,50%
work injury insurance 0,41%
disability insurance 3,16%
maternity and sickness insurance 2,28%
parental insurance 1,0%
14
Factors afecting
social insurance system
• Demographic indicators
(birth rate, mortality, migration)
• Macro-economical indicators
• The proportion of grey economics
• Political decisions
15
Social insurance system burden
persons employed/pensioners
900
800
805
772
700
729
778
701
661
600
619
588
759
628
500
400
300
200
100
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
number of pensioners per 1000 contributors, at the beginning of the year (January)
16
Population age structure change (%)
70,00%
65,60%
60,00%
65,80%
62,00%
57,20%
58,90%
59,90%
57,20%
51,20%
49,50%
50,00%
40,00%
38,60%
36,50%
30,90%
30,00%
20,00%
27,10%
22,30%
23,20%
20,60%
20,50%
23,10%
10,00%
0,00%
1996
2000
2008
2011
w orking age (15-61)
2020
2030
2040
2050
2060
over w orking age (no 62)
17
Projected average age for persons
reached age 62, years
95
90
85
81,8
80
75
82,5
83,9
85,3
86,7
87,9
89,1
85
80,3
82,1
83,6
80,5
75,6
75,6
77,1
78,8
70
65
1990
2000
2010
2020
men
2030
2040
2050
2060
women
18
Changes over the Life Cycle
• Approximately one third of the life cycle
person is retired
• Rising life expectancy of persons increase
the period of retirement, at the same time
employment period declines
• In order to maintain appropriate
proportions, retirement age has to be
increased
19
Proposed Amendments in Concept Paper
On the Long-term Stability of the Social
Insurance System
1) Gradual increase of retirement age from 62 to 65
starting from 2014:
– for 3 months starting from 1 January 2014 and 1 January 2015
– for 6 months starting from 1 January 2016 to year 2020
2) At the same time increase of early retirement age up to
age of 63:
– for 3 months starting from 1 January 2014 and 1 January 2015
– for 6 months starting from 1 January 2016 to year 2020
20
Social insurance budget deficit/reserve
balance after expected change
1200
700
200
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
-300
-800
-1300
-1800
-2300
w ith planed reforms
w ithout planed reforms
21
Increase of retirement age in EU
Estonia
until 2016 retirement age for women will be increased up to age of existing
retirement age of men – age of 63. Starting with year 2017 retirement age will be
increased each year for 3 months until year 2024, when retirement age will be 65
Lithuania
from 2012 retirement age will be gradually increased up to age of 65: for women
– each year for 4 months and for men – each year for 2 months
Czech Republic
from 2006 to 2030 retirement age will be increased up to age of 65
Germany
from 2012 to 2027 retirement age will be increased up to age of 67
Hungary
from 2012 retirement age will be increased up to age of 65
Malta
until 2027 retirement age will increase up to age of 65
The Netherlands
in 2020 retirement age will be increased up to age of 66 and in 2025 up to age of
67
Slovenia
until 2020 retirement age will increase up to age of 65
United Kingdom
from 2024 to 2026 retirement age will be increased up to age of 66
22
Thank You!
arvils.aseradens@lm.gov.lv
23