Growing Old Wisely: Addressing the Challenges of an Aging Society in Bulgaria
October 3, 2013
- Bulgaria is facing a steeper decline in working age population than any other country in the world.
- This means that fewer and fewer Bulgarians will be available to support people outside of the workforce.
- A new World Bank Group study offers policy directions on how the country can address the challenges of an aging country.
Bulgaria is facing a number of challenges resulting from shifting demographics in the country. The country is projected to face the steepest decline in the working age population worldwide - with 1 out of every 3 Bulgarians over the age of 65 by 2050 and only 1 out of every 2 of working age.
As more and more workers exit the workforce and fewer Bulgarians replace them, the need to implement broad-based reforms today in order to help the country avert potential challenges tomorrow continues to intensify.
In response to this situation, policy makers in Bulgaria are working with the World Bank Group to assess the challenges posed by an aging Bulgaria and identify policy directions that can mitigate their impact.
According to the recently launched Mitigating the Economic Impact of an Aging Population: Options for Bulgaria report, a key determinant of a country’s income level is the size of its working age population, meaning that the shrinking workforce in Bulgaria is likely going to lead to lower growth, increasing demands on the health care sector, and lower living standards for populations throughout the country elderly population.
However, strategic action and policy reform in several key areas can help lessen the impacts brought on by ongoing demographic shifts and can help steer the country toward a more inclusive future that provides for young and old Bulgarians alike.
“Bulgaria is facing an extraordinary demographic challenge,” notes Doerte Doemeland, World Bank Senior Economist and author of the report, “at the same time it is clear that it has many options to successfully mitigate its impact.”
Growing older does not mean growing less,the earlier policy actions are taken, the earlier the elderly of the future will benefit.
By prioritizing innovation, for example, Bulgaria can lay a foundation for sustainable growth in the country. Increasing production - while simultaneously maintaining the same amount of capital, labor, and other inputs (productivity growth) - can stimulate economic growth in the wake of Bulgaria’s declining workforce. This growth is likely to generate better employment opportunities throughout the country. Furthermore, by increasing work force participation among groups that are less likely to participate in the workforce – such as women, the elderly and Roma – Bulgaria can further boost its workforce and buffer against a dwindling work force.
Efforts to ensure sustainable public debt will also be needed, as the country moves toward a more inclusive future. Two key components in this strategy include a more sustainable pension system and more efficient spending on health care. As the population continues to age, better services will be required to provide healthy and prosperous lifestyles for the elderly. Improvements in the sustainability and efficiency of the systems providing for this population, along with other public spending priorities, are necessary in order to better provide both adequate living standards for all Bulgarians.
One additional piece in this puzzle is long-term care provision in the country. Scaling-up both public and private long-term care options – with a focus on community and home-based services will be important.
Collectively these reforms and initiatives can help Bulgaria many of the challenges posed by the impending aging crisis. By adopting these reforms and others today, Bulgaria can help provide a better future for all of its citizens – both young and old.
“Growing older does not mean growing less,” says Doemeland, “the earlier policy actions are taken, the earlier the elderly of the future will benefit.”