The Future of Population Aging in Algeria: Implications on Pension Sustainability

Farid Flici, Centre de Recherche en Economie Appliquée pour le Développement (CREAD )

Historically, the Algerian population structure has been very stable and advantageous for socioeconomic development, with 6 to 8 persons of working age for every one person of retirement age. Beginning in 2022, this ratio fell below 3 for the first time in history, and it is predicted to go below 3 by 2045. Such a move is already impacting Algeria's public pension system's financial balance, with a greater impact projected in the future. In this work, we present an overview of the aging situation in Algeria and demonstrate its consequences for the long-term sustainability of pensions, while distinguishing the influence of aging from the effect of other variables involved in retirement functioning. We also explore various reform options and conclude with some suggestions to mitigate the effects of aging.