Demographic changes and public finance: evidence from Greece

Abstract

The aim of this study is to analyse the impact of demographic changes on public finance in Greece during the period 2001-2018. This paper reports on an econometric model of three demographic variables (age dependency ratio, ageing ratio and fertility ratio) and five fiscal variables (debt to GDP ratio, total expenditure to GDP ratio, total revenue to GDP ratio, social benefits to GDP ratio, and the social contributions to GDP ratio). The main empirical evidence supported by other research studies suggests that there is a relationship between demographic changes and public finance. Considering the current situation of the demographic changes as well as the predictions, one can conclude that actions and reforms are needed to address the problems that arise from the ageing of the population in Greece.