FISCAL IMPLICATION OF POPULATION AGEING AND SOCIAL SECTOR EXPENDITURE IN ROMANIA
FISCAL IMPLICATION OF POPULATION AGEING AND SOCIAL SECTOR EXPENDITURE IN ROMANIA

Author(s): Mihaela Onofrei, Anca Florentina Vatamanu (Gavriluță), Elena Cigu Rusu, Gigel Paraschiv
Subject(s): Public Finances
Published by: Editura Universităţii »Alexandru Ioan Cuza« din Iaşi
Keywords: public finance sustainability; healthcare expenditure; population ageing; sources of vulnerabilities;
Summary/Abstract: The entire context of economic turmoil has significantly overload public finances, increased deficits, and debt levels but most important, highlighted the value of understanding the sources of vulnerabilities that can lead to a systemic financial crisis. Even if the early identification of the sources of vulnerability is extremely important because this would allow the introduction of proactive policies, with direct implications on the consolidation of a sustainable way to act, the emphasis falls on the long-term implications, with presumption, on two primary variables: the demographic one (which takes into account the aging of the population) and globalization, which through the international competition, will increase mobility and exposure to external shocks. The research aimed to analysing the relationship between public finance challenges and the costs of population ageing (measured by healthcare expenditure) and invokes an element of novelty related to the international literature, more exactly, the importance of the mechanisms of management and control of the fiscal risk. Based on retrospective and prospective analyses, the study attempts to suggest mechanisms of management and control capable to manage some major concerns for fiscal sustainability, such as population ageing and the growing healthcare expenditure. The usefulness of the results concerns both the institutional levels and the decision-makers, stressing the priority ofconsolidating the fiscal responsibility goals and the importance to follow policies that safeguard the well-being of nation.The entire context of economic turmoil has significantly overload public finances, increased deficits, and debt levels but most important, highlighted the value of understanding the sources of vulnerabilities that can lead to a systemic financial crisis. Even if the early identification of the sources of vulnerability is extremely important because this would allow the introduction of proactive policies, with direct implications on the consolidation of a sustainable way to act, the emphasis falls on the long-term implications, with presumption, on two primary variables: the demographic one (which takes into account the aging of the population) and globalization, which through the international competition, will increase mobility and exposure to external shocks. The research aimed to analysing the relationship between public finance challenges and the costs of population ageing (measured by healthcare expenditure) and invokes an element of novelty related to the international literature, more exactly, the importance of the mechanisms of management and control of the fiscal risk. Based on retrospective and prospective analyses, the study attempts to suggest mechanisms of management and control capable to manage some major concerns for fiscal sustainability, such as population ageing and the growing healthcare expenditure. The usefulness of the results concerns both the institutional levels and the decision-makers, stressing the priority of consolidating the fiscal responsibility goals and the importance to follow policies that safeguard the well-being of nation.

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