The average age of the population reaches 42.5 years, 7.2 years higher than in 2011, life expectancy "makes a dent" in the pension scheme

The number of deaths registered in Albania was 21,286 during the year 2023, about 11.3% fewer deaths compared to the previous year. The high figures of emigration of the working-age population and the increase in the number of people in the third age are expected to give a heavier blow to the pension scheme.

Referring to the data of the 2023 Census, the average age of the population is 42.5 years, from 35.3 years that was in the 2011 Census. The transition towards an older population is also observed in the dependency ratios. The youth dependency ratio decreased to 24% from 30.4% estimated in the 2011 Census, while the elderly dependency ratio increased to 30.4%.

How will this affect the pension scheme?

This predicts a deepening of the gap between the number of pensioners and the number of contributors. The increase in life expectancy has increased the number of pensioners and the decrease in the number of people of working age has decreased the number of contributors. In addition, the informality of the economy and black work translate into fewer contributors to the social security scheme, where currently in Albania there are about 1 million and 300 thousand employees, 40% of whom do not contribute to the scheme.

For the pension scheme to be self-financing, social security contributions must be paid for at least 2 active employees for each pensioner. Currently, there are 705 thousand pensioners in Albania and the contributor-beneficiary ratio is 1.17 to 1.

Low fertility rates and the downward trend, combined with the emigration of the reproductive age population resulted in a narrowing of the base of the population pyramid. Fertility below replacement level since 2001, increased life expectancy, and migration remain the main factors of population aging.