The Fiscal Consequences of Shrinking Populations
Staff Discussion Notes, October 26, 2015
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- The Fiscal Consequences of Shrinking Populations
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Bibliographic details
- Authors: Benedict J. Clements, Kamil Dybczak, Vitor Gaspar, Sanjeev Gupta, Mauricio Soto
- Published: October 26, 2015
- Series: Staff Discussion Notes
- DOI: https://doi.org/10.5089/9781513544885.006
Summary and key finding
- This Staff Discussion Note examines the fiscal challenges from population decline and aging between now and 2100.
- Core finding: without reforms, pensions and health spending would rise to 25 percent of GDP by end-century in more developed countries, and to 16 percent of GDP in less developed countries, with potentially dire fiscal consequences.
- Given uncertainty in population projections and associated large fiscal risks, a multi-pronged approach will be required.
Projections and quantitative outcomes
- Time horizon: between now and 2100.
- Projected spending outcomes without reforms:
- 25 percent of GDP by end-century in more developed countries (pensions and health spending).
- 16 percent of GDP by end-century in less developed countries (pensions and health spending).
- Publication metadata and numeric identifiers:
- Pages: 34
- Volume: 2015
- Issue: 021
- Series: Staff Discussion Notes No. 2015/021
- Stock No: SDNEA2015021
- DOI: https://doi.org/10.5089/9781513544885.006
- ISBN: 9781513544885
- ISSN: 2617-6750
Policy recommendations and options
- Entitlement reform:
- Start now but proceed at a gradual pace.
- Policies that affect demographics and labor markets:
- Implement measures that influence fertility, migration, and labor force participation as part of a broad strategy.
- Fiscal policy and public finance improvements:
- Strengthen tax systems.
- Improve efficiency of public expenditure.
Risks, uncertainty, and approach
- The analysis highlights substantial uncertainty underlying population projections and the associated fiscal risks.
- Recommended response: multi-pronged approach combining entitlement reform, demographic and labor-market policies, and fiscal improvements to mitigate large fiscal risks.
Authors and publication
- By Benedict J. Clements, Kamil Dybczak, Vitor Gaspar, Sanjeev Gupta, Mauricio Soto
- Publication date: October 26, 2015
- Document type: Staff Discussion Note
Source: "The Fiscal Consequences of Shrinking Populations", Staff Discussion Notes 2015, 021 (2015), Benedict J. Clements et al., DOI https://doi.org/10.5089/9781513544885.006.
Content in this bundle
- _sdn1521 — Executive Summary and Key Findings