Demography Being Abused in Russian Pension Age Debate, Vishnevsky Says

Paul Goble

            Staunton, July 22 – Both supporters and opponents of the Russian government’s plan to raise retirement ages frequently invoke demographic statistics; but all too often, Anatoly Vishnevsky of Moscow’s Higher School of Economics, they use these figures incorrectly and thus make it more difficult for Russia to solve some of its problems.

            In a comment for Demoscope, he demographer points to two areas where the problems are especially great: discussions of the link between pension age and life expectancy and arguments about the demographic burden the elderly (and the young) place on working-age cohorts (demoscope.ru/weekly/2018/0775/expertise.php).

            “One of the chief arguments in favor of raising the pension age is that the current pension age was set in the early 1930s and does not correspond to the present-day level of life expectancy,” Vishnevsky says. This argument is frequently invoked but it is “based on an incorrect understanding of ‘life expectancy.’”

            Life expectancy figures usually are the number of years people will live from birth; and in those terms, Russia has made significant progress over the last century by reducing infant mortality.  But when it comes to pension ages, the relevant figure is the life expectancies of those who have reached that year. 

            And there Russia has made little progress, at least compared to other advanced countries. Since the 1920s, the average Russian man at age 60 can expect to live only 1.6 years longer than did his counterpart 90 years ago.  That means that if the pension age is increased to 65, he will live in retirement 2.5 years LESS than his counterpart in 1965 would have.

            The situation with regard to women is even worse. If their retirement age is boosted as planned, they will live on pensions 2.7 years less than their predecessors did in 1965. If Russia could boost these life expectancies before the reform was fully in place, that would be one thing – but achieving significant increases is “utopian” – and everyone should admit that.

            The second demographic argument Vishnevsky addresses is the burden that non-workers place on the working-age population.  There the arguments of supporters of raising the pension age are stronger; but, and this is important, they are placing all the burden on resolving this problem on the shoulders of pensioners and potential pensioners.

            “The real relationship of the number of working and non-working people depends of course not only on demographic but on economic and social factors,” Vishnevsky says. The demographic ones are “very important” and can as is the case with Russia make solving the entire problem far more difficult.

            In Russia today, he continues, “structural demographic changes which it is practically impossible to influence are beginning to have an unfavorable impact on the economy and social life of the country and this is becoming a serious challenge for Russian society.” In this, Russia is hardly alone: many countries face this problem.

            But Russia today is almost unique in the way in which politicians and journalists have acted as if this problem suddenly appeared, grew enormous and must be dealt with via extreme measures.  None of those things is true, the demographer argues.  And a more gradual approach is thus more likely to be effective.

            A major reason so many Russian political figures get this wrong, he says, is that in the 1990s, as a result of the echo from World War II, Russia had one of the lowest non-working to working burdens in the world. Since then, things have changed; and some have acted as if this problem dropped from the sky rather than being one experts saw coming a long time ago.

            Radically raising the retirement age won’t solve this problem; that will require a far more complex approach, Vishnevsky says. And coming up with one will require a serious effort because “the growth of the demographic burden is only beginning.”

            The current short-term fix on offer “will solve nothing,” he says. Moreover, it “will generate social tensions and in the final analysis can lead the social situation in the country into a dead end out of which it will be very difficult to escape.”