DD. The relative effect of DD was much higher for regions with low initial growth rates (laggards) comparing to leaders – 41 and 21 percent respectively. The difference in contribution of DD between initially rich and poor regions is 23 percent and 33 percent of total GDP growth.

# _Forecasting of demographic dividend_

We use the estimated model to forecast the demographic dividend. To do this, we used the official demographic forecast provided by Rosstat. It compares the population by regions and divides it into three age groups: before working age, working age and older than working age. Also there are three scenarios – named _high, low and baseline_ – but we renamed the scenarios _._ According to Rosstat, the _high_ scenario assumes higher amount of total population and the higher fertility rate what translates to higher youngdependency ratio and therefore corresponds to a lower working is ratio. The low is _vice-a-versa_ . Instead, we chose to call them high/low fertility rate scenarios as it reflects they structure better (Figure 8 in the Annex 1). We simulated the DD by three scenarios for all regions (results reported only for the macro regions in table 4) and for the national level assuming that aging structure in Russia would be the same as it was in 2011 – the last year for which we have actual data.

Table 4: Forecasts of Demographic Dividends

||Simul<br>Sc|ation of d<br>enario 1(l|emograpfi<br>ow fertilit|c dividend b<br> y)|ased on offi<br>S|cialpopul<br>cenario 2|ation byag<br> (baseline)|egroups fo<br>|Sc<br>recast|enario 2(|high fertili|ty)|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
||2012‐16|2017‐21|2022‐30|2012‐30|2012‐16|2017‐21|2022‐30|2012‐30|2012‐16|2017‐21|2022‐30|2012‐30|
|Russian Federation|‐1.2|‐1.8|‐1.5|‐1.5|‐1.5|‐2.3|‐2.2|‐2.0|‐1.6|‐2.6|‐2.5|‐2.3|
|Central Federal Okrug|‐1.3|‐1.9|‐1.7|‐1.7|‐1.6|‐2.5|‐2.4|‐2.2|‐1.7|‐2.7|‐2.6|‐2.4|
|North‐Western Federal Okrug|‐1.3|‐1.7|‐1.3|‐1.4|‐1.6|‐2.3|‐2.1|‐2.0|‐1.7|‐2.4|‐2.2|‐2.1|
|Southern Federal Okrug|‐1.2|‐1.8|‐1.5|‐1.5|‐1.4|‐2.2|‐2.1|‐2.0|‐1.6|‐2.6|‐2.6|‐2.3|
|North‐Caucas Federal Okrug|‐0.6|‐1.5|‐1.5|‐1.3|‐0.8|‐2.0|‐2.1|‐1.8|‐1.2|‐2.6|‐2.8|‐2.3|
|Volga Federal Okrug|‐1.2|‐1.9|‐1.6|‐1.6|‐1.5|‐2.4|‐2.3|‐2.1|‐1.6|‐2.7|‐2.7|‐2.4|
|Ural Federal Okrug|‐1.3|‐1.7|‐1.3|‐1.4|‐1.6|‐2.3|‐1.9|‐1.9|‐1.7|‐2.5|‐2.2|‐2.2|
|Siberia Federal Okrug|‐1.3|‐1.8|‐1.3|‐1.4|‐1.6|‐2.3|‐2.0|‐2.0|‐1.8|‐2.6|‐2.4|‐2.3|
|Far East Federal Okrug|‐1.2|‐1.6|‐1.2|‐1.3|‐1.5|‐2.1|‐1.9|‐1.8|‐1.7|‐2.4|‐2.2|‐2.1|
|10 Leaders|‐1.1|‐1.7|‐1.5|‐1.5|‐1.3|‐2.2|‐2.1|‐1.9|‐1.5|‐2.6|‐2.5|‐2.3|
|10 Laggards|‐1.2|‐1.7|‐1.3|‐1.4|‐1.4|‐2.2|‐1.9|‐1.9|‐1.6|‐2.5|‐2.3|‐2.1|
|Rich|‐1.2|‐1.7|‐1.3|‐1.4|‐1.5|‐2.2|‐2.0|‐1.9|‐1.6|‐2.5|‐2.3|‐2.2|
|Poor|‐1.2|‐1.8|‐1.5|‐1.5|‐1.4|‐2.3|‐2.2|‐2.0|‐1.6|‐2.7|‐2.6|‐2.4|

We see that in all scenarios for all macro regions (and almost all regions) the contribution of the DD would be negative for regional GDP per capita growth. Negative contribution increases after 2017 when the decline of working age ratio becomes faster and reaches low levels. The distribution of DD effect across Federal Okrugs is quite uniform. As we discussed before, the dependency ratio in the scenario with a high fertility rate is higher. Therefore, the negative contribution of DD in the scenario with a high fertility rate would be 1 percentage point higher than in the scenario with a lower fertility rate. It means that government is faced with a tradeoff. Supporting fertility and trying to increase the total population, the policy makers would put additional pressure on regional GDP growth at least in the medium term (until 2030).

We are now in position to simulate the impact of increasing the retirement age. For this, we would need information on the “effective” retirement age – the real age at which people retire which could differ from the official retirement age in practice. Some people are allowed to and prefer to retire earlier because of specific labor conditions or problems with health, while others may choose to work longer. It means that on average people retire “gradually.” It is hard to estimate exact retirement age, so we assume that official retirement is a good proxy for this “effective” retirement age. We note in Table 5 that a gradual increase in 15