Economist Lvovsky: There's Room to Raise the Retirement Age. It Can Be Raised for Women

Answering a question about the possibility of further raising the retirement age, Lvovsky noted that there is still room for this — but not for everyone.

"There's room to raise it. It can be raised for women. In our country, women still retire five years earlier than men."

As the economist argues, this difference arose not from modern discussions about equality, but as a legacy of the industrial era. In the first half of the 20th century, when the pension system emerged, people lived much shorter lives, worked predominantly physically, and women gave birth to many children without the capabilities of modern medicine. Under these conditions, earlier retirement for women was socially justified.

As Lvovsky argues, when pensions were introduced, most people simply didn't live long enough to receive them. It wasn't a reward for long work, but rather poverty insurance for the few who did live to old age and could no longer work.

Now, however, the situation is different. Physical labor no longer dominates the market, medicine has significantly improved, and people live longer and healthier lives.

The economist suggests comparing a modern 30-year-old man with his peer a hundred years ago.

"[Before] at 30, he was a mature man who had seen life. He already had a wife, a home, and six children. He might have already gone to war, or somewhere else. A man with wrinkles and a bushy beard.

Павялічыць

Well, a modern thirty-year-old... In Europe, officially, youth extends to 35 years old! This is a person who, most likely, is still finding themselves, perhaps at the beginning of their career, often living with parents, often without their own home, often still unmarried, without children, and so on. This isn't because we've become more naive. It's because our lives have become easier, and life allows us to be, shall we say, carefree for longer. This is a side effect of economic development."

At the same time, Lvovsky emphasizes: the situation with men in Belarus requires a separate approach. In his opinion, the country faces one of the largest differences in life expectancy between men and women in the world.

"Our women retire five years earlier, and women also live on average 10 years longer than men. This is a national catastrophe."

That is why, the economist believes, there is currently no practical possibility to raise the retirement age for men.

"There is literally nowhere to raise the retirement age for men now. (...) According to some data, men in our country live on average only one year in retirement. So there is a serious problem here, but it is a separate problem."

According to Lvovsky, the main problem is that after raising the retirement age several years ago, the authorities did not implement systemic changes.

As the economist notes, without a comprehensive reform, the state will have to return to this issue again and again.

"They raised the retirement age once, but didn't carry out any reform. This means it will have to be raised again now. The retirement age must be raised together with a general pension reform, so that it doesn't need to be done again in another five years, and then again in another five years."

Lvovsky sees a way out in transitioning to a mixed pension system, where a portion of mandatory contributions would accumulate in citizens' personal accounts. In his opinion, this is still possible, but only if there is no delay.

"We can still afford this. But again — before it's too late. If we start this reform in 15 years, it will be too late."

The economist warns that without changes, the country will have to choose between two unpopular scenarios: either significantly raise taxes for those who work, or face widespread dissatisfaction from people of retirement age.

As Lvovsky noted, Belarus has no source of "easy money" from which the pension system could be financed.

"We don't have a petrocracy in Belarus. Everything that is created here is created by people."

For this reason, the economist explains, pensions are always paid by those who are currently working and creating economic value. If the system is not reformed in advance, then in the 2040s-2050s, an increasingly larger portion of workers' salaries will be redistributed to payments for an ever-growing number of pensioners.

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