The effects of emigration on the sustainability of the Pension system in North Macedonia.

The aim of this paper is to empirically investigate the effects of emigration on the sustainability of the Pension system in North Macedonia. In this study three different sets of tests are used for empirical analysis: a stochastic forecasting method in order to predict the movement of demographic and fiscal variables in the future; a time series investigation in order to quantify the effect of emigration on pension expenditure, and a microsimulation dynamic model in order to analyze the potential effects of different pension reform alternatives on the sustainability of the pension system in North Macedonia. The results suggest that mass emigration has a significant negative effect on pension sustainability in North Macedonia. The results suggest that massive emigration of young people from North Macedonia will negatively affect the growth prospect and labor market in the future. The results suggest that immediate reforms are needed and gradually increasing the contribution rate to 20% and retirement age for men and women to 65 years would stabilize the Pension system in North Macedonia in the long run. [ABSTRACT FROM AUTHOR]