Population Ageing Impact on Pension System in the Republic of Moldova

2009–2010

ERSTE Foundation Fellowship for Social Research Ensuring Income Security and Welfare in Old Age

Population Ageing Impact on Pension System in the Republic of Mol­ dova; Possible Righting Ways, Evolution, Trends, Socio-Demographic Effects and Mechanisms of Reestablishment Sainsus Valeriu

Population ageing impact on pension system in the Republic of Moldova; Possible righting ways, evolution, trends, socio-demographic effects and mechanisms of reestablishment

Prepared by Valeriu Sainsus, PhD Doctor, Profesor Associated, Academy of Economic Studies of the Republic of Moldova, Geography Department

1

Content Introduction and general aspect of ageing 1.

Methodological aspects

2.

Demographic situation in the Republic of Moldova

3

Factors of ageing

4

The national ageing context

5

Relationship between ageing and socio-economical situation of the old population

6

Ageing discrepancies and disparities. Question Surveys (Study case)

7

New mechanisms of policy making and ways of demographic policy implementation in ageing

Conclusions

2

Introduction and general ageing aspects Population ageing is a worldwide phenomenon, but it is advanced particularly in highly developed northern countries. The phenomena will enface the principal aspects of demographical processes and make the growing of regional imbalances. The demographical issue is complex and diverse, generating eventual future problems. More than that, the effect of the problems will be felt in the future but their causes come from past or recent decades. Ageing is one of the principal phenomena in demographic issues of the world population, which are very large and profound even for the European region. In 50 years the average age of the European population will increase from 37 to 47. Towards the year 2040 every fourth person will be up to 65 years old and every seventh will be up to 75.

In different countries the processes develop in a different way. They are specific in demographical essence and for each population. After the demographical transition ageing became inevitable. Every year in the world the quota of population beyond 60-65 has increased with one more million people. Many countries have already experienced population ageing. Only about 18 countries in the world are out of this phenomenon. It seems to be the natural consequences of economical development that extend life expectancy and lower birth rates.

Ageing is a very different process for each geographical region.

In 2050 the number of population aged 60 will be equal with the population up to 15 years old and will constitute 2 billion people. The global rate will be 22% reported to 11% in 2009. The Republic of Moldova holds the 14th place in the world compared to ageing processes1 in the countries from the top in matters of ageing. In the next 30-40 years the pensioners will form the biggest part of the society. This tendency will be almost impossible to be modified.

The young society has evidently some advantages from the demographical and the economical points of view as well. The young population is more educated, and receptive to do any modifications and exchanges in society even in periods of transition to market economy.

Ageing, as a process, does not mean only increasing of population beyond 60 + or 65+ years old, but it involves the increase of average age, ageing of labor force with reducing productivity as well etc. If we regard ageing by sex structure we have the same contradictory element. Ageing created the disproportion between age groups, male and female population.

This is only a general consequence of the demographical ageing. In case of the female population, in particular, in Central and East Europe the pension age is in disproportion, being smaller than 55 and 57 years old (for example in the Republic of Moldova and Russia) in comparison to men. This is even though women’s life span is longer with 5-7 years in conditions 1

United Nations, Demographical Yearbook 2006

3

that the reproduction function for female is minimized or it is even lost. The females reproduction age is only 1, 2 TFR2. For East European countries’ ageing coincides in society of poor and large categories of population. Or, for this group of countries, in social and economical essence ageing leads to the increase of poor population.

Ageing womanised the population. This is because female population of the pension age is much more numerous in report to the male population, which is 30-40% less than female population of pension age. Even in this group the pensioners did not accommodate to average living standards because pension is about only 20 or 40 % from the medium salary.

For the European countries this phenomenon is not new as population ageing was born in Europe, but for each country it does not have the same consequences. Many countries from this region don’t adapt the ageing processes, new demographical modifications with social and economical development. In the same time, they don’t feel the reality of this phenomenon. In Eastern Europe the processes were identified later but more intensively and specifically. In reality, the consequences are not only of demographical issue, but of economical and social essence as well. Actually the process is in progress which develops a new demographic qualification of “ageing nations” In addition, the consequences are radical for poor countries where social and economical factors are closely related. Developed countries become rich before ageing, but developing countries - before becoming developed. More than that, rich countries have the possibility to compensate population losses through legal and illegal migration; or the developed countries compensate the needs of labor force without economical money spending.

2

TFR – Total Fertility Rate

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1. Methodologies aspects From the methodological point of view ageing as a process is not so concrete. It is seen differently if comparing one group of countries with another. The first symptom to state is that the population ageing is the increase of population beyond 60 and more. The population that has comparatively a large number of elderly is likely to have more deaths and fewer births each year than a population of equal size but which is largely composed of young people. Ageing is the transition in population issues concentration from the young to old ages. Or in demographical essence it is called demographical polarization age. In essence, the phenomenon is a contradictory one, as ageing notion is appreciated differently by some country groups, for example – the age of 60, or 62, 5 (the Republic of Moldova), for large European countries being the age of 65 and for Japan - 70. At the same time the population aged after 60 feel the ageing different and they are differently motivated.

For developing countries 40% of population is up to 15 years old, while for developed countries only less than 25 %. Or if young population constitutes 25 percent, this signifies that ageing is in role of action. In time there where the number of young population of school age is equal with the old (pension) population age in demographical essence there is a situation with elements of crisis which requires a basic revision of demographical mechanisms.

Discrepancy in population ageing is within limits of pension age which is not the same for each country and directly depends on legislation of the country. If for UE countries the difference is not so big, than for Eastern European countries the pension age differences are in large limits from one country to another. In this essence all East European countries can be divided in two groups: one which agrees to move retirement age to higher rates (from 60 to 62 years old); the second group views the increase of pension age with some reserve. Along with the birth rate, age structure is the demographic “engine” that determines (or retards) population growth.

Bojie Garier showed clearly the coefficient of ageing in the demographical essence: if population has the coefficient 12%, then we may consider population ageing. Also some studies mention that if population reaches the coefficient 12 %, ageing will become much more intensive. In the same way the average age of population (evolution of average age) shows what is happening during this period of ageing, in particular, with the labor force. There where the ageing of labor force persists the productivity is decreasing. But this coefficient is not a plausible factor, because the labor force has different structures by age and by sex and, in addition, the structure changes through migration or specific mortality. Bojie Garnier coefficient can be seen only superficially, because ageing, taken as a process, is larger and more complex. With this coefficient in mind we don’t see the qualitative aspects of ageing through life longevity and so on.

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In the modern period ageing adopts new dimensions. Ageing is compared a little differently with the past period. The people live more and the confirmation of this is their life expectancy. The ageing is not so clearly defined nowadays because capacities of the population are new and the necessary time to become old is different. If population is able to live over 70 years old or more and has a better health then it might be a mistake to say that this population is merely ageing or old. Or the appreciation is relative from one nation to another.

In addition, in time where the female population loses the function of reproduction and has a longer life span, it would be the time to develop or to think over the standards of retirement. In essence the modification of demographical behavior is necessary in order to constitute the elements of new priorities in report with ageing processes.

Sex analysis of ageing phenomena confirms the decrease of social protection of population which shows the specific problems which the female population has even in the process of ageing people.

In scientific literature ageing is appreciated as being the third demographical transition3. The consequences of ageing are not only of social and economical areas. In demographical essence ageing makes different demographical structures, increases the female rate population, the discrepancy between male and female inside generation and, in general, demographic structure, thus reducing the fertility, which are closely related, raises the population poverty and increases the social pressure through generations’ social instability. In addition, along with ageing generations they will survive next to each other, which will change individual life courses (professional and individual), change labor market with a large proportion of older workers.

3

World Bank, From Red to Gray

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2. The demographic situation in the Republic of Moldova The demographical picture of the population of the Republic of Moldova is different in report to the last two decades. Actual evolution and long term will change the national demography. With great regret but all the demographical changes are negative from the demographical point of view and socio-economic future.

In demographical issues there are “demographical pure problems”4 of the population in the Republic of Moldova. Even if we consider that problems are in essence demographical, all of them are correlated economically socially and demographically.

The demographical issues of population are indentified in demographical crisis because it has the aspects of depopulation in large dimensions. In 20 years of independence the country lost about 350 000 of its population, where the process can be qualified as the depopulation at national level. The depopulation process is one the main phenomena which affected directly the quantity of population and even matched most rural population which constitutes more than half of the population of the country. This process has a reflection upon the population redistribution on national level.

Country is out of reproduction or in demographical essence the “demographical crisis” persists.

The mortality compensates totally the fertility. Reduction of fertility stimulates demographical genofond loses which will be felt very intensively during the next decade. The increase of the families’ instability, change of the reproduction behavior, reduction of potential population with peculiarity of procreation between women and men are only some of the basic factors. The divorces increased in the last 20 years, and even doubled for rural areas. One quarter of children are born out of a full family.

Excess of migration make the demographical stability more fragile. At the same time females and males participate in migration where the consequences are critical in demographical essence.

The level of education of the young generation and modern life requirements accelerate the migration processes. Through migration processes in the last decade we identify the transfer in migration with priority from internal to external migration.

4

Problems with meaning of health reproduction and health situation of population

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3. Factors of ageing Ageing is an opportunity if the social priorities coincide with the economical possibilities, but discrepancy makes another contrary situation confirmed by the practice.

Ageing as a phenomenon has many cases; the first one is decrease of population reproduction.

Reducing the natural rate is the first symptom of ageing which is not felt in demographical essence so intensively within a short period of time. But with multitude circuit of generations ageing presses the demographical issues. The second case is the increase of population’s age span, which is identified with logical processes after the demographical transition. They are the best realizations of humanity in the last decade of our modernity. This factor is much more important in ageing processes because it makes ageing different. With this factor into account we differentiate the stage of ageing. From analysis and demographical observations both of them activate at the same time or compensate each other. But the third case is migration, especially for the Republic of Moldova, which affects the population lost in exchange with migrants. It is important to mention here, that from the demographical point of view and in demographical essence, migration makes ageing profound and intense. For a country that loses the migrants it loses demographical reproduction support for future as well, because migrant constitute the demographical potential part of population. And, in time, there where the migration is tangent with the family aspect and includes children, the effects are quite dramatic.

In another way, migration increased the activity of the female part of population which has demographical effects and socio economical motivation. Nowadays, the female are not motivated to be with their families. The career and economical activity make the decision to accept migration. Saying otherwise, in emigrational societies, like the Republic of Moldova, the female migration is in fashion nowadays; or there is a stereotype formed in the society that this is the way to realize your abilities to have a decent life.

These are only the some general aspects of migration upon ageing.

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4. National ageing context Taking into consideration the unforeseeable diminish of natality in predictable future is inevitably reducing the number of population and demographical ageing. In the national context ageing is a new demographical phenomenon of the population in Moldova. Ageing as a phenomenon is identified and starts in time with the last decade of the XXth century. For the country this phenomenon coincides with the period of its independence.

More than that, ageing5 is one of the principal causes of reducing in modern period of economical efficiency, which has been identified in all the regions with old population. The first demographical problem from a future point of view and durable in time will characterize population issues of the country. While ageing is a challenge, it creates the problems for socialeconomic systems but at the same time economic opportunities as well.

Ageing, in case of the population of the Republic of Moldova, is a process at a mature stage which is implemented quite rapidly. We identify the time of ageing starting in 1990 when the fertility grew down so rapidly with reflection in demographical structure. But starting with year 2000 we stated the increase of life expectancy that population appreciated as a “bonus of longevity”.

Even if ageing period is short for the Republic of Moldova, we can identify two stages of ageing in national context: the first one is the increase of the population of pension age or near to pension age. This period of time is from 1990 to 2000. And the second one is the modest increase of population’s life expectancy from 2001 to 2008, which will constitute about 70 years in the next decade in the Republic of Moldova. In addition, there will be a very large generation of this pension age, which was born in the period after the Second World War. Or this is the generation from the fifth decade of XX century.

We appreciate ageing as a specific feature for the country in the Republic of Moldova. The country has a small number of population confronted with aspects of large depopulation (from 1990 to 2009 the losses of population are appreciated to be 350 thousand people), intensive emigration, in particular population of reproductive age, and large aspects of realization their capacities, about 60 % of population is concentrated in rural areas, which is confronted much more intensively with ageing, representing the coefficient 15,1 in 2007.

5

A demographic definition of “old people”: the proportion of the population aged 65 or more years (or 60 and more) this is a basic indicator of population ageing, but in report with retirement age for every country is different.

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In addition, the principal factors of ageing are post demographic transition of fertility, which is compensated totally by mortality. The Republic of Moldova faces rapid ageing mainly as a consequence of low fertility level established in recent years.

Ageing is identified very intensively and profound in demographical structure if we take into consideration the demographical future of the population as well as the demographical risks. The processes present different types of evolution in report to regional countries.

In addition, 15 years were without census which disturbs the basis of statistical information for scientific research and prognostication of tendency population for future time even in the ageing process.

Ageing process 65+

Demographic dependency Coefficient

1990

2005

2050

1990

2005

2050

World

6

7

16

10

11

25

Europa

13

16

28

19

23

48

Russia

10

14

23

15

19

38

Ukraine

12

16

29

18

23

50

Republic of Moldova

8

10

26

13

14

42

Romania

10

15

29

16

21

50

United Nation Data

Ageing in short time caused the demographical instability and created disproportion inside generations speaking of sex and the age between generations. On average one of four people in the country is aged beyond 60+ years old. More than that, demographic dependency will become emphasized in short time in conditions where productivity of labor force decreases.

Demographical structure of population of the Republic of Moldova between two censuses (Census data, 1989; 2004) The figures show that changes in the last 15 years between two censuses in demographical structure is crucial for the demographical future. The Republic of Moldova is on the final step of using the demographic bonus. After 1990 all generations that have entered in population issues are double smaller.

Or in demographical essence derrises of reproduction have direct influence on ageing processes of population. In the same time the year 2007 was the last one that stated a large generation. On the next stage small in number generations will enter 10

in demographical circuits. The effects of ageing will be much more felt in society in the years 2010 or 2012, when people of 60+ will constitute the biggest part, which were born after the Second World War, now being in the period of pre-pension. (See figure) Deterioration of demographical situation happened in the last decade of XXth century, which is reflecting negatively upon all demographical construction. In the last eight years, 1999-2007, the rate of old population has slowly increased while the rate of population of 0-9 age is reduced with 8.4 % from the total population, for urban area 7.6% and for rural area 8.3%. At present the ageing influence is not felt in society, rural areas serve an exception, as there we feel the absence of labor force in the agricultural field.

Another factor of disturbing the demographical structure is the high level of mortality for male population of age 45-55, this being available for present and for the future periods of demographical evolution. Also the death rate in case of men aged 29-39 and 29-39 years old compared with death female rate. This phenomenon will unbalance the sex structure of the population.

Ageing and life cycle The fact that is not so distinct is that individual and demographical ageing are different processes. The life cycle is increased through life span. Ageing condition is different not only from one generation to another, but also for different parts of society (rural or urban, by social structure) or region of country.

In addition, the new requirement of modernity makes the modifications. Population enters later in production because there are increases in the education cycle (implementing of lyceum cycle, undergraduate and master university cycles in the Republic of Moldova). Still, the economical essence is quite considerable.

Life expectancy and premature mortality as a human problem in the Republic of Moldova The increase of life expectancy and reducing of premature mortality is one big realization of civilization. Along with the increase of life expectancy increased the time when both the individuals and society have possibilities to use it in their activities or to enlarge the limits of their activities. Infantile mortality, child mortality and mature mortality reduce the opportunity of population to use this priority in life.

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Comparative evolution of Infant Mortality Rate

In the opinion of demographers accentuated ageing and increase of old–old population (population of age 70+) in demographical issues associated with economical lamentable situation reflect uncertainty. And as a matter of fact there isn’t a decent care system to answer the requirements and necessities of this population category in the country. This is the second ageing step in the Republic of Moldova. In future, population’s life expectancy will increase and the rate of this category will have a larger distribution, which inevitably will catch the pension age. It is known and scientifically demonstrated that in time there where life span goes beyond 70 years old, spending is double for health maintenance.

Of course, at this stage one way of solving the problem would be the redistribution of income from education to care social system but this is effective only for a short time. The coefficient of ageing shows the principal aspect in ageing.

Coefficient of total ageing population (Number of people beyond the age 60+, Annual Statistical Book, Republic of Moldova) The Republic of Moldova was qualified as an old country in the last decade of XX century. If for urban population ageing is 14 %, then for rural it is about 16% in 2005 and 15% in 2007.

But the rural areas constitute more than half of the population (60%) where the rural females represent the coefficient 18%. This situation in demographers’ appreciation is not possible to change without economical spending. the situation for the years 2010 – 2020 will be alarming, which in demographical appreciation is not such a long time.

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Ageing processes are rapid in comparison with the developed countries. For example France needed 80 years for ageing, Belgium 70 years, Sweden 50 years, where coefficient of ageing increased from 8 % to 12%. In the Republic of Moldova the ageing increased from 7, 7% (1959) to 12, 6 in less than 30 years. Ageing processes have a geographical disparity. (See annex 2) 5. Ageing relationship and socio-economical situation of old population Actually ageing in society produced a pure category of population. In country where the categories of old population will constitute more than 800 000 people with minimal sources of existence, the stability is out of this society. Ageing created conditions for lonely life of old population, it increased the number of incomplete families. Along with economical development families become smaller and dispersed. In addition, ageing makes difference in income and in social life; it forms the difference in culture and traditions. The main idea of it is that the females risk much more to be in extreme limit of poverty. This chance is characteristic for the population in developing countries. The chance of enrolling old population is minimal being stimulated by the traditions and habits. For the Republic of Moldova where the female population from agricultural field is without a qualification the possibility to be enrolled is practically zero.

Life span differences between a man and a woman create the risk to be without any life sources.

Or women are more frequently poor and lonely, and finish their life in solitude.

To realize the analytical evolution of ageing is not possible out of average age of population.

Between two censuses average age was increased from 31.8 to 35.3. In 15 years the population of the Republic of Moldova has increased the average age with 3.3 years, and this process will continue inevitably. In the same way differences are larger than the motivation of migration in the last 20 years. (See annex 1) For the rural population the average age is with 3-4 ages more than for the urban. In Singapore the average age is 36 with life expectancy of 80 years old, while in the Republic of Moldova - 37 with life expectancy 68 years. The average age in essence shows not only aspects of ageing or increase of old part of the population, but also the increase of the age for the labor force, which will be reflected upon the productivity and economic potential of population.

Medium age of population

Census data 1930, 1970, 1979, 1889; 2004

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The figure shows that ageing will create the opportunity to increase the rate of female population. The female population’s life span is with 5-7 years longer. In addition compared to male population, which has usually a bigger pension, for women it constitutes only 60- 80 % from men pension. A woman finds herself insecure after the death of her husband. Females have very low probability of marriage and finish their lives as widows and retired. In developing countries where the system of protection is feeble the female is completely unprotected. More than that, the old population consumes more services and products, which are different comparing with all the population or the younger part of it.

Evolution of population per category

Population total

2001

2002

2003

2004

2005

2006

2007

3,627.2

3,617.7

3,606.8

3,386.0

3,395.6

-

3581.1

663,287

634,553

627,553

620,692

618,277

621,4

619,4

-

-

() Pensioners (population) Rate of active 2.4 2.5 2.3 2.3 2.3 population in report to pensioner population Annual Statistical Book 2002- 2007; Women and men in the Republic o Moldova 2008

The table shows that economical and social pressures that affect ageing will improve in the future decades. There exists the possibility that one active person will create the pension of one old person if in medium today two people of active age create the pension for one. Purest will be in the same way with all society because pension age is being identified as that age with minimal source of existence below the average salary per economy. Pension age pushed the population in the purest pole and, in addition, polarized the society. Or the real pension nowadays constitutes only 30-40 % from the average salary per economy.

Average pension in the Republic of Moldova (MD Lei, were the 10-11 lei = 1 US dollar)

The pension was of course increased, but only in number in the last period of time and not in economical value by supporting this category of population. The economical potential of 14

national finances was decreased. Or medium pension is estimated about 50-55 $ US where the medium salary per economy in 2007 was estimated about 1 300 lei MD (about 120 Dollars).

Actually, from this data we draw the conclusion that every forth citizen is below poverty, every person , part of the pension system has to exist with 1.25 dollar (about 15 lei) per day but one part of pensioners have their pension below the average in the country. In essence, this shows that the old population is without any possibilities of using services necessary for a decent life.

Another aspect of ageing processes is reported to older persons where the average salary and pension represent the middle situation of this part of society or category of population.

Ratio of salary to pension 2001

2002

2003

2004

2005

2006 (as of 1 January 2007)

2007

Average salary

543.7

651.5

890.8

1103.8

1319.5

1965.4

2065,0

Average

140.34

166.87

217.98

336.75

397.18

442.96

442,3

20.97%

24.13

24.47

25.52

30.10

22.53

21,4

pension

% pension to salary

From the table above it is evidently seen that pension increase does not mean supporting the old population. Actually, pension increase is only in number but not in economical essence and support to improve the situation or level and insurance of old population’s life. In addition with ageing requirements, spending for life is twice more in comparison to the first stage of ageing, giving the fact that the old population consumes more medical services. Whether the pension will report to rural or urban life requirements, we will see much more inequality and discrimination for this category of population. In rural area prices for goods are bigger, but the average pension is lower with 10-20% or even more, comparing to the population from urban areas. In addition, urban old population pay much more for urban life and rural old population don’t have the opportunity to use services, as they are out of life requirements.

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6. Demographic ageing impact. Ageing and health situation From the economical point of view active population is the most important demographic category, which is identified as the potential labor force of society. Numbers, structure, level of education, professional formation as well as way of using this category influence directly the GDP and economical, social development. The importance derives from the situation that active population produce goods and values necessary for the whole society, and generate the economical progress with important role for economical reforms. All demographical evolution put the fingerprint for short time and long time upon labor force in economy. In time and space the demographical component make the principal difference of labor force supply.

Evolution of labour force The year 2007 makes the new decade in evolution of population when the number of grown-up population decreased. Only in 2007 the decrease constituted 19.8 thousand people, or it decreased with 0.8%. From here the economical potential of society will decrease not only from ageing of the labour force but also from the result of reducing number of young generation, which will be included in national ce demographical systems. In addition, young generation which will enter in labour land will not have pressures upon labour market; perhaps they will be twice smaller. Or, in demographical essence, the Republic of Moldova finishes the usage of “demographical bonus�.

The ability of social systems to support and develop services for old population, as well as to cover the necessity of population with medical competitive people would be the main tasks in ageing support. In this direction the Republic of Moldova is little below compared to the EU. Dynamics insurance with medical assistance (per 10 000 people)

Annual Statistical Book

16

In general aspects the Republic of Moldova does not present much difference in insurance with medical assistance but the question is which quality and for what category of population are these services performed and oriented? Or does the range of services correspond to the new demographical qualities of the population and will it correspond to the requirements of other services?

Dynamic of absolute number with medics and medical medium staff

On the national area the level with family doctors is different and medium level per country are contradictory if we take into consideration that rural population constitutes the majority (65-70% of total population), which does not benefit of medical services in rural areas and are obliged to move in administrative units or rayons6 to use medical services or to consult a doctor.

Level of insurance with family medics per administrative units

This category of population is limited in movement from the point of sickness and age. More than that, many rural villages have a far distance to rayon (district), about 40 km or even more, thus the old population does not accept so easily to travel. In the period of transition to market economy the medical services for population are concentrated in rayon centres whereas villages have only a medical post, no matter how big or small it is. This is the injustice for rural 6

Rayon – administrative unit in country

17

population from administrative units. It constitutes the major part of the population but are destined to be out of support.

In figures we see that internal situation compared to administrative units. In four units there are just 2 family doctors for 10 000 people, for example in Cantemir, Rezina, Hancesti, Cimislia.

And the question is if it is possible to catch or to contact in time a family doctor or to have quality services in conditions of intensive ageing population.

Dynamics of medical assistance in public sectors

The tendency is to reduce the number of public assistance in conditions of ageing population, which is contrary to demographic tendency. The major part of rural population requires maintaining and accommodating public sectors to new demographic reality.

Potential life after pension.

Population’s potential lives are directly dependent on health status and life span of the population. In case of the Republic of Moldova, the potential life is jeopardized by short living period after pension for men, as well for women. Super mortality of men population after pension limit and super mortality of rural population reduces the potential of life not only of men population but also of the whole population.

Potential life should be related to the limit of pension period. The test shows that the aged population confirms the barrier to promote active life, to develop activities, to produce because of health. Life potential is short for rural population where the life span for this category is only about 67.4 years old (2004, census data).

6. Ageing discrepancies and disparity. Questioners Surveys (Study case) The main idea of ageing is that this phenomenon created differences which have large aspects of all demographical processes. Real ageing discrepancies start from the generation inside, but with

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large effects upon the big number of the old population, even with differences in geographical plane.

For the Republic of Moldova, as a country with modest possibilities to enlarge demographical knowledge and scientific research of ageing problem, it is important to establish the main particularities and specific evolution of this process at present. The first source allows knowing the real situation more profoundly.

In general, old population issues of the Republic of Moldova present the same situation compared to Central East European region, but our questionnaire survey allows us to make some of the specific resolutions. According to this survey only 44.3% of old population live with their spouses, 34.3% are single and only 7.1% with child’s family. Or, about 48 % of old population in pension period lives in solitude. About 69.6% of all interviewed people confirmed the pension as the unique source of their existence. Work at the time of retirement is not a priority for this category of population in the country, because 67.5% of all mentioned that they did not work after pension. Fore more the rural population’s exhausted physically.

According to the survey the work is continued only in case of those who prepare documents or brings the first pension. At the same time the retired population doesn’t like to work after being retired, 62% of all respondents in retirement disagree to work. The differences are between the urban and the rural population, the first agrees/has to work after pension ages; 53% of urban in report to 20.7% of rural population. The financial situation and need of a decent life serves to be the motivation of acceptance to work (in particular for urban people) for 75% of respondents, 12% say that will accept to work after pension age for enjoyment and 13% to have an occupation. Many of the old population 51.6% would like to have only part time work, except for the rural population which agrees to have house hold occupations.

At the same time the retired population confirms that 53.2% are not economically protected by the government, 41.8% confirm that are not socially protected. Even if in the country there are differences in pension amount between the urban and rural (rural pensions are lower) area, 72% of the urban population say that they are not economically protected in report to 58% of rural people who said that were protected by government.

Pensioners have a contrary attitude to increase of the pension limit, many of them, about 75%, confirm that optimum limits is 55 ages for women and 60 years for men. As an argument being the fact that old population doesn’t have a proper capacity to work. In our survey we attested that pensioners demonstrate the collegiality between men and women and at the same time between rural and urban populations.

About 75% of respondents said that they spend their pension on food, medicine, services. In rural area spending of the pension is in particular for services and medicines, in urban – for food 19

and services. The first necessity of respondents is a financial one, being followed by medical assistance on national point. According to our survey the financial problem in southern regions is more profound.

About 64.4 % have never been in a sanatorium after being retired. Pensioners mentioned that the principal cause of not improving their health was the absence of limited services free of charge based on health policy and absence of the services in the locality of residence.

Child support is unessential, only for 40 % which mentioned that have various or moral support.

Many of them mentioned that their family helped until then because many of them were without a place of work or had temporary or occasional sources of existence. At the same time in large aspects the pensioners feel the difference between categories of pension. About 56% of pensioners say that differences between categories of pension are quite big, whereas 22.1% mention that differences are very big.

The ageing process is felt by the old population, where 70, 4 % confirm that ageing population in location of residence is in increase through new old large generations and migration in report to only 23, 2%, which don’t feel the ageing. Perception of ageing is more intensively felt by rural pensioners.

Even if population at pension is out a place of work, they prefer active household work activity, agriculture in household (in particular for rural population where we attest that it as an important source of existence), gardening, cleaning - 40% of them, about 10% have active rest (nieces attention, crochet, church rest, walking).

With the help of this survey we attest the absence of intergenerational tension. About 38.9% of interviewed people say that young generation have a well-wishing attitude, 36.0% presented themselves as indifferent and 22.6 % are contemptuous.

7. New mechanisms of policy making and modalities of demographic policy implementation

in ageing

Pension systems in aging societies – in need of reform and furthermore stressed by the pressure of globalization – require parallel reforms of the labour market and effective lifelong learning, not only to promote working longer, but to ensure that people can do so. At the same time, the working population should be motivated to contribute to pension schemes and prepare for the old age.

At the same time it is proper for a modification of the principles of universality pension system by a multi pillar strategy. The pension system should be basically restructured. It’s time to move

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from the socialist generous pension system to social security, which is one of the principal goals of our modern time. Generational pension solidarity system should be the priority.

The country will have sombre future in demographical aspect. As ageing is reducing not only the future of the population, but enlarges the social problems. If ageing is a long real process in policy making, then there are some important aspects to be developed: 1. Short-term policies to appease the consequences. Short-term polices are not really effective, as the practice shows. Moreover, they can cause negative outcomes and problems for future perspectives.

2. Policies should be of long-term, with goals to be reached in the long run. Policies aiming to decline population ageing had indirect policies consider the components of demographic change: fertility and mortality in addition to health: healthy-ageing, active-ageing policies.

The first step of solving ageing problem is to redistribute the sources and funds from education to pension systems. This activity has to be done right now in order to cover the spending of increased pensioners which in the next 4-5 years every generation of pensioners will be doubled.

This way are for a short time but will give us the opportunity to make fewer pressures upon pension system.

The second step is to prolong the age pension from 55-57 ages for female to 60 ages and for men from 62, 5 ages to 65 ages. This increase will permit the recordation of pension age with EU stats. Still, it is not advisable to realise the increase now until population’s life expectancy will not be of 70 years old.

In general we appreciate this mechanism for short duration because ageing is profound and developing. In addition, in the last decade life span was in decrease and reflected the right of to benefit from a pension. And this mechanism in particularly is not recommended for the population of the Republic of Moldova because 60% of population are concentrated in rural areas where life span is much shorter. Prolongation really is not recommended until life span of the population will not be 70 years old or more or it will be the same with EU population’s life span. Neglecting it will be reflected upon human rights and will make pressures upon society.

Correlation in decision between age pension and life span after pension In report with international studies life span after pension should constitute 15 years. And the general tendency is to increase. If we admit this hypothesis for demographic issues for our country with disproportion by sex and generations, the violation of the individuals’ rights is evident. Age cense of pension age should be corrected in correspondence with mortality modifications to high age. Starting with 1980 this coefficient is smaller in report with the settled

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limits, what confirms once again that increase of pension limits have not the fundamental basic motivation at moment.

In this way the high level of man mortality in the last decades is opposite to the decision to increase the age for pension limit. Men mortality is in correlation with health state of the population, which we identify to be quite lamentable, with high level of illness for this category, invalidity etc, factors which minimize potentially economical efficiency.

Another situation is for women whose life longevity after being retired is about 11 years in report with 6 years for men. If we compare or counter propose it to international standards, it is to be established that pension limits for women are necessary to be prolonged. From here, dividends pension for women are troublesome more in report with men. In addition, women population have less contribution to social sectors, but consume much more in comparison with men population.

Decision of pension appreciation represents another aspect. It is considered incorrect to appreciate the pension with income calculation within the last period of time. Productivity in the last 10 years before pension is less and the salary increases only if qualifications are high. That is why we identify the discrimination for professions with high qualification there where mobility increase is proportional with qualifications. It would more correct would to calculate the pension from the middle age of population till the last year of activity or in the last 15 years before going to pension. This period of time seems to represent and enface the way of pension estimation.

In the Republic of Moldova there are some ways of solving ageing problem, which are appreciated as being durable and were implemented in large aspects in all developed countries at the same time in EU. The first one is to increase the pension age but slowly in report to the increase of population’s life span. An example would be to delay increase to pension limits with one month per every year for next pension generations. This mechanism will not be so intensively felt in the whole society and also for generations that will catch pension and pension age. And also, in economical essence, there will not be extra spending and pressures from the budget and social system. If life span increases up to the age of 70, the spending to budget will constitute about 300 million lei.

For the Republic of Moldova one inconvenience is that more than 60 percent of the population live in rural areas where life span is usually much shorter. In this essence, counting the evolution of life span for rural population is important to be kept.

The second one is to promote active life for the old generation, to create possibilities for the old part of society to realise economical growth through work day (full – it is recommended especially when there will increase double number of pensioners) with four hours or with half 22

work load. After being retired a big part of population still has capacities and abilities to work, to continue their activity. This is recommended only in first five years after pension limits. We can realise this opportunity only with recent generation of old ages. At the same time, this will solve many problems for old population; it will have a source of existence, especially the urban population and will have the possibility to pay for medical assistance and services, to have decent urban life. Our researches confirm that old population (even urban) prefer and have work activity to live better. The population, in particular from rural areas, which work in the agricultural domain, are physically exhausted and their potential is considerably reduced.

The third one is to minimize the number of people who have pension age limit of 45 years old.

This category is very big in total number of all pensioners.

Now the government constituted the National Commission of Population to cense, to promote and popularize the demographic problem. Green Card on Population and Development in the Republic of Moldova should be also based to a larger extent on population projections.

The country does not have special centres, which have on objective to research demographic problems and to promote new mechanisms of solutions and concepts. Demographers’ activity in the country is dispersed and the necessity to complete skills and to develop collaboration inside the country is being felt. International organizations implementation of demographic mechanisms and demographic durable policies are also necessary to be analysed. It is also necessary to improve demo informational performance. The country does not have credible projections. It is possible to assess future labour force, number of pensioners, number of students, etc. only by making population projections. The best available methodology should be used to achieve this purpose.

The main role here is attributed to the International Organization UN, UNFPA, but also to the governmental insistence in order to redress the situation. It is impossible to develop a Population and Development National Strategy without assessing the future population. Integration, even globalization processes, requires accommodating to national and international situation even if they are of a quite specific nature.

Conclusion Ageing is a real process of demographic issues which requires immediate solutions to omit the heavy consequences. That process is correlated economically and socially. Even if this process is new, it is in role of action. Ageing is a specific process for each country. It is necessary to coordinate largely the practice, mechanisms and knowledge in ageing. Ageing research will offer the opportunity to make right decisions and to appease the social cataclysms and disparities. The 23

potential life is short but there exist resources to redress the situation. Economical and social systems do not cover life necessities for the old population.

The last two decades demonstrated in addition the necessity to implement new demographical strategies and concepts in order to maintain the equilibrium between the demographical and the socio-economical development.

Annex 1

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Average Age of the Population (census data 2004)

Annex 2 25

Ageing Population Quota in % to Total Population

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SELECTIVE REFERENCES: Census Data 1989, 2004 Annual Statistical Book 2000- 2007; Women and men in the Republic o Moldova, 2008; Results of Survey of health Status of population in the Republic of Moldova, Chisinau 2006 Aspects of the Standard of living of population in 2006, Chisinau 2008 EU Employment and Unemployment, 2008 Labor Market in the Republic of Moldova, 2008 United Nation, World Population Polices, (2005), New-York, 2006; United Nation, “Demographic transition and socioeconomic development” INFPA, NewYork 1979; Council of Europe, Resent Demographic Development in Europe 1999; OECD Ageing and Employment Polices, 2004; RECEP’s Reports, N14, 2007; Luis Henry, Multilingual Demographic Dictionary, Second edition, Belgium, 1976; Ageing Horizons, Policies for ageing societies, 2008 Genevieve Reday-Mulvey Working Beyond 60, Key Policies and Practices in Europe

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