Dependency Ratio as a Predictor of Fiscal Indicators: A Panel Data Analysis of Post-Socialist EU Economies
Stryhul A. A., Osypova S. K.

Stryhul, Anton A., and Osypova, Svitlana K. (2026) “Dependency Ratio as a Predictor of Fiscal Indicators: A Panel Data Analysis of Post-Socialist EU Economies.” The Problems of Economy 2:68–78.
https://doi.org/10.32983/2222-0712-2026-2-68-78

Section: World economy and international relations

UDC 314.18:336.14(4-11)

Abstract:
This article examines the impact of demographic ageing, measured by the old-age dependency ratio (OADR), on key fiscal indicators across eleven post-socialist Central and Eastern European EU member states: Bulgaria, Czechia, Estonia, Croatia, Latvia, Lithuania, Hungary, Poland, Romania, Slovenia, and Slovakia, over the period 2000-2023. A multilevel empirical methodology is applied, incorporating panel unit root tests, cointegration analysis, correlation analysis, OLS regression in levels, and first-difference specifications with Newey-West standard error corrections. Health and pension expenditure data are analysed over the sub-period 2013-2023. Three transmission channels of demographic ageing are confirmed: a significant positive association with healthcare expenditure (five countries), a positive link with overall employment rates (four countries), and a typological split in pension expenditure as a share of GDP between pension-reforming and non-reforming countries. Rising employment under higher OADR is consistent with the delayed retirement hypothesis. The pronounced cross-country heterogeneity of results prevents the construction of a unified regional model and underscores the decisive role of institutional context in shaping fiscal responses to demographic pressure. The findings provide an empirical basis for differentiated fiscal planning and social protection reform strategies tailored to the demographic trajectories of individual post-socialist economies. The value of this study lies in the comprehensive application of a multilevel econometric methodology to post-socialist EU economies, yielding a multidimensional empirical picture of the fiscal consequences of demographic ageing and contributing to a deeper understanding of this phenomenon in the regional context.

Keywords: demographic ageing; demographic dependency ratio; fiscal policy; public expenditure; healthcare; pension system; employment; post-socialist countries.

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Stryhul Anton A. – Postgraduate Student, Department of Accounting and Finance, National Technical University «Kharkiv Polytechnic Institute» (2 Kyrpychova Str., Kharkіv, 61002, Ukraine)
Email: anton.stryhul@emmb.khpi.edu.ua
Osypova Svitlana K. – Candidate of Sciences (Economics), Associate Professor, Department of Accounting and Finance, National Technical University «Kharkiv Polytechnic Institute» (2 Kyrpychova Str., Kharkіv, 61002, Ukraine)
Email: Svitlana.Osipova@khpi.edu.ua

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