Russian Economy Set to Take Another Hit – A Much Smaller Labor Force in the Future
November 8 – To the extent that falling prices for natural resources will force
Moscow to rely on the development of other sectors, the Russian economy faces
another and perhaps even more serious hit in the near term – a dramatically
smaller workforce, each of whose members will have to support significantly
larger pensioner and youth populations.
in turn means that the government will have to go into debt to support these
non-working groups because it will not be able to rely either on earnings from
the export of raw materials or from the production of its own workers in other
sectors, thus imposing further downward pressure on economic growth.
the Bank’s experts say that Russia’s available workforce will continue to
decline by “approximately a quarter” by 2050 compared to 2010, which will mean
that each worker will have to “carry” 50 percent more people who will be either
underage or pensioners, with the latter group especially likely to increase along
with the average age of the population as well.
aging of the Russian population, the Bank’s experts say, will by itself reduce
Russian economic growth by 1.3 percent each year over the next 25.And that will require more government
spending on pensions and health care, something Moscow should deal with in part
by raising the retirement age, an extremely controversial step in the
the elderly can be kept on the job, the Bank report continues, that would boost
Russia’s labor force by two to three million and keep the lower birthrates of
the 1990s and subsequently from limiting economic growth in the non-raw
World Bank expects birthrates in Russia to continue to fall and suggests that
Moscow should devote “more attention” to supporting those families “who want to
have more children,” a pro-natalist policy to which the Russian government has
given lip service but not provided the enormous amount of resources that would
be required for it to be successful.
report also calls for boosting training and pay for women so that more of them
will want to remain in the workforce even if incomes rise – and to assist that
by providing support for fathers whose wives have recently given birth. Doing
any of these things will be controversial; doing none of them will make Russian
economic growth in the future far more problematic.