Ivan Lichner, Institute of Economic Research SAS, Slovak Republic

Pages: 3 – 12

Abstract

Over the coming decades, the expenditures of the health, long-term care and pension systems will rapidly increase, with significant expected impacts also on the labour market due to the population ageing in Slovakia. Those factors will considerably influence the development and sustainability of public finances. This paper presents the estimation of the future development of the Slovak pension system deficits obtained through the stochastic simulation model. The applied model framework consists of two parts (expenditure and income) and estimates the future development of wages as a stochastic process the parameters of which are based on the historical development for the years 2000-2014. The development of pensioner inflation as an important growth factor the pensions paid was estimated on the basis of the single equation regression model.