Impact of baby-boomers' retirement

21 apr 2010 Autor: Alina Pahoncia

Romania's baby-boomers, that is more than 1.7 million Romanians born in the years that followed the 1966 decree banning abortion, will exit the labour market as massively and abruptly as they entered. Twenty years from now, when they reach retirement age, the contributions of a third of Romanian employees will vanish from the budget and the state will have to support the ones who are now supporting the economy. Are the state and the society in general ready for such a scenario? What will happen when the 1.7 million Romanians supporting the economy retire? The strongest blow will be dealt to the public pension system, in the context where there will be ever fewer employees to sustain the state social security budget amid the falling birth rate. The dwindling population will also have a negative impact over the higher education system and the labour force market and will eventually hurt economic balances. "It is an important problem not just for the pension system, but also for the healthcare system," considers Bogdan Belciu, manager with A. T. Kearney consultancy.