War is Not Russia’s Only Problem...


 
The fertility rate of Russia has been falling over recent decades and is now sub-replacement resulting in a declining workforce. Attempts by the Government to increase the rate, such as the policy of tax breaks for larger families, appear to have been ineffective.

As can be seen in the chart below, there is an ever-growing cohort of dependent retirees relying on this diminishing working-age, tax-paying demographic. In 1950, there were more than a dozen workers supporting each retiree in Russia, now there is but 4. That sharp fall in the worker-to-retiree ratio is projected to drop further, to 2.5 workers by 2050, and therefore appears increasingly unsustainable.

Number of Workers to each Dependent (65+) in Russia
The working-age population represents those aged 15 to 64. Period: 1950-2024.
War is Not Russia’s Only Problem...




The problem is not just the growing number of retirees, but the fact they cost the Government the most out of any age demographic. The generation born in the 1960s and now retiring was one of the biggest in the nation’s history. This will put pressure on the Russian taxpayer financing pensions. The factors of the war, the fall in migrant labour and the shrinking workforce all exacerbate this cost. An aging population will also likely require substantial increases in spending on health and care provisions.  

Russia has had to gradually raise the retirement age to 65 for men. But we are yet to see if this intervention will bolster the workforce and ease this emerging generational burden on the Russian taxpayer, with fewer workers supporting an ever-growing army of expensive dependents. 

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