Population development in Poland - consequences for labour market and pension system

Elżbieta M. Gołata 

Poznań University of Economics (PUE), Al. Niepodległości 10, Poznań 61-875, Poland

Abstract

In Poland, we are witnessing demographic transformation of intensity and scale unobserved in other European countries. Declining fertility and mortality causes progressive aging of the population. Intensive emigration, especially of young people contributes to adverse changes in the labour force structure. Not only decreasing population size, but also alarming changes in generation’s renewability pose new challenges for social policy.

The study presents population development in Poland in the context of labour market and pension system perspectives. The analysis covers changes in the number of Polish population since the turn of the century with special consideration of 2002 and 2011 censuses as well as 2014 population projection. The discussion is conducted for previous and current retirement age.

Changes in the number of population are accompanied by changes in its age structure what requires particular attention in quality assessment of the data and approach in the estimation methodology. First we compare estimates of potential labour resources, according to the CSO data: Population Censuses and Labour Force Survey, including adjustments proposed by K. Saczuk (2014). Future perspectives are based on demographic projection prepared by the Central Statistical Office for years 2014-2050, its critical assessment and modifications by A. Fihel (2015) and our own estimates.

According to the latest CSO data, in the end of 2014 Poland was a country of 38 478 602 inhabitants. However, depending on the definition adopted and the applied estimation method, one can observe differences reaching more than 1.5 million people. The most authoritative population estimates come from the census which takes place every 10 years. Census estimates are updated every year until the next census to produce current population estimates resulting from the cohort component method. Conventionally the next census is also used as the basis for adjustment of current population estimates in the preceding years. It occurred that in 2002, current estimates exceeded census population size for about 400 thousands people, while in 2011 an underestimation amounting 330 thousands was observed.

These differences depend also on the definition of the estimated population. There are two main concepts: actual and usually resident population, which differ mainly in the way of including migration. The census usually resident population (EU Regulation No 1260/2013, Article 4) should include all permanent residents, except those who are staying somewhere else for more than 12 months as well as persons who are temporary staying in the country for at least 12 month. While the actual population includes all permanently inhabited (registered) in Poland irrespective of the fact whether these persons stayed in the country during the census or were abroad (regardless of the time of living abroad). Early census data showed the difference between actual and residing population of 1 257 000 people. Estimates released in 2014 pointed the difference of 467 258, and according to my estimates it should amount to 1 537 363 people. The essential point of CSO estimates is that it includes only people having status of a legal resident. The biggest discrepancies between estimates relate to young people in the age of most intensive professional, matrimonial and procreative activity, what of course affects all labour market characteristics and is essential for population projection.

The results of the analysis conducted show consequences of demographic change for labour market and pension system in the light of applied estimation methodology and different retirement age:

- Potential labour force (working age population is shrinking from 24,5 million in 2013 to 16,6 million in 2050, according to old pension age and to 19.0 million according to new pension age.

- Post working age population to working age population ratio will more than double: from 0.29 in 2013 to 0.75 in 2050, as to old pension age or from 0,28 in 2013 to 0.52 in 2050,  according to new pension age.

- Employment to population ratio equals 0.6 what means that the Effective Labour Force is much lower: 15 837 compared to 24 409.7 working age population in 2015.

- In the perspective of 2050 projection Old Age Dependency Ratio will almost triple form 21% in 2015 to 59.22% in 2050.

- Basing on usually resident population, simulation provides more pessimistic results as concerns number of inhabitants, but slightly more optimistic age structure of the population. In the perspective of 2050 Old Age Dependency Ratio will less than double: amounting to 24.4% in 2015 and 39.8% in 2050.

As these two factors: demographic and labour market changes are decisive for widespread concerns about the financial viability of public pension systems, predominantly funded on a pay-as-you-go basis, the above comments should be considered when making decisions on pension system reform.

References:

Fihel A., 2015, The impact of temporary migration for demographic perspectives of Poland (Wpływ czasowych migracji zagranicznych na perspektywy demograficzne Polski), „Wiadomości Statystyczne”, 7, 2015, GUS, Warszawa

Gołata E. 2013, Population census and Truth (Spis ludności i prawda), „Studia Demograficzne”, nr 1/161 2012, Warszawa 2012,  PL ISSN 0039-3134

Gołata E. 2014, New paradigm in statistics and population census quality. http://www.q2014.at/fileadmin/user_upload/GOLATA_NEW.pdf

Gołata E. 2015, Estimation of Fertility in Poland and of Polish Born Women in The United Kingdom. http://demografia2015.ue.poznan.pl/pres/EG_Fertility_in_Poland.pdf

Saczuk K., 2014, Labour Force Survey in Poland in 1995-2010. Data correction. (Badanie Aktywności Ekonomicznej Ludności w Polsce w latach 1995-2010. Korekta danych), NBP, Instytut Ekonomiczny, Studia i materiały nr 301, Warszawa

Presentation: Oral at Current Economic and Social Topics 2015, by Elżbieta M. Gołata
See On-line Journal of Current Economic and Social Topics 2015

Submitted: 2015-12-07 13:27
Revised:   2015-12-14 02:17
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