RETIREMENT ECONOMY WITHIN THE CONTEXT OF PROBLEMS OF DEMOGRAPHY AND THE LABOUR MARKET IN THE BALTIC STATES

The world economy grows old in line with the rise in life expectancy of population, which is especially characteristic for developed countries, namely, they form the basis of the national and world economy. Many researchers worldwide have noted a tendency of population ageing concurrently with rising unemployment. The adverse demographic situation and labour migration in the Baltic States allow speaking about inviability of the present retirement system for future pensioners. The aim of the present paper is to identify new tendencies in the labour market that allow speaking about a crisis of the state retirement system. To achieve this aim, the author considers issues of population ageing in the world and Latvia by using the life cycle hypothesis of saving with regard to the Baltic States where the demographic crisis is particularly pointed. The author raises a hypothesis about lowering retirement age that enables early youth employment. The author's proposal about early youth employment by reducing terms of learning at secondary school, and introducing professional training in the senior classes and colleges could be one of the ways for achievement of balance in the labour market. The virtualisation has led more professions to demand computer skills and ability to work with other equipment that can appear in the future. The education system must focus on lifelong learning. In the labour market, the youth will be ranked high if they acquire professions; consequently, youth unemployment will decline.