Pension assets as an investment in economic growth: The case of post-socialist countries and Ukraine

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Post-socialist governments are looking for the best options to implement a fully funded pension system along with a pay-as-you-earn pension scheme. The paper aims to establish the impact of pension assets on economic growth using the example of post-socialist countries (Hungary, the Slovak Republic, Slovenia, Poland, and the Czech Republic). The use of methods of correlation and regression analysis allows determining the type of dependence (linear, exponential, gradual, and logarithmic) of countries’ economic growth indicators on pension assets and patterns for their investment (deposits, securities of public and private sectors). The obtained economic growth indicators of the studied post-socialist countries show a strong logarithmic dependence on the size of pension assets: Gross fixed capital formation depends on changes in the pension asset amount by 76.44% and GDP by 71.01%. The economic growth of the studied post-socialist countries is most significantly influenced by pension assets invested in deposits. Investing pension savings in public and private sector securities is less effective. The proved provisions determine the expediency of moving from the predominant pay-as-you-earn pension scheme to the predominant fully funded pension system for Ukraine. Such a transformation requires a stable and efficient construction of the country’s banking system, a developed policy for reforming the pension system while considering the criteria of the internal demographic, social, and financial situation.

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    • Figure 1. Graph of the logarithmic dependence of Gross fixed capital formation on pension assets (R2 = 0.7644)
    • Figure 2. Graph of the GDP logarithmic dependence on pension assets (R2 = 0.7101)
    • Table 1. Equation of the dependence of Gross fixed capital formation on pension assets
    • Table 2. Equation of the GDP dependence on pension assets
    • Table 3. Share of investment patterns in pension assets in 2019
    • Conceptualization
      Oleh Kolodiziev, Наnna Telnova, Ihor Krupka
    • Project administration
      Oleh Kolodiziev
    • Resources
      Oleh Kolodiziev, Myroslav Kulchytskyy, Iryna Sochynska-Sybirtseva
    • Visualization
      Oleh Kolodiziev
    • Writing – original draft
      Oleh Kolodiziev, Iryna Sochynska-Sybirtseva
    • Formal Analysis
      Наnna Telnova, Myroslav Kulchytskyy, Iryna Sochynska-Sybirtseva
    • Methodology
      Наnna Telnova, Ihor Krupka
    • Validation
      Наnna Telnova
    • Writing – review & editing
      Наnna Telnova, Ihor Krupka
    • Data curation
      Ihor Krupka
    • Supervision
      Ihor Krupka
    • Investigation
      Myroslav Kulchytskyy, Iryna Sochynska-Sybirtseva
    • Funding acquisition
      Myroslav Kulchytskyy, Iryna Sochynska-Sybirtseva
    • Software
      Myroslav Kulchytskyy