Implications of higher retirement age for the labor market

The paper considers the impact of the increase in retirement age on labor supply and economic growth. Combining own estimates of labor participation and demographic projections by the Rosstat, the authors predict marked fall in the labor force (by 5.6 million persons over 2016-2030). Labor demand is also going down but to a lesser degree. If vigorous measures are not implemented, the labor force shortage will reach 6% of the labor force by the period end, thus restraining economic growth. Even rapid and ambitious increase in the retirement age (by 1 year each year to 65 years for both men and women) can only partially mitigate the adverse consequences of demographic trends.