Monday, January 26, 2015

Well-being of the elderly in the South Caucasus: A problem today, a bigger problem tomorrow

The world population is getting older, and this trend will likely continue as a result of decreasing mortality and declining fertility. International organizations predict that the aging of the population will cause economic problems in countries that already have difficulties in providing proper welfare for the elderly. The countries of the South Caucasus are no exception in this regard. According to the Global AgeWatch Index, by 2050, the population over the age of 60 will exceed 30% in Armenia and Georgia and reach nearly 26% in Azerbaijan, compared with, 14.7% 20.1%, and 8.8%, respectively, at present. This blog post examines the demographic composition and economic situation of the elderly in the South Caucasus countries based on 2013 CRRC Caucasus Barometer (CB) survey data. The post focuses on people who are at or above the standard retirement age (63 years old or older for men and women in Armenia, 59.5 years old or older women and 62 years old or older men in Azerbaijan, and 60 years old or older women and 65 years old or older men in Georgia), and when asked about their primary activity or situation, report that they are retired and not working. This group constitutes 12% of all respondents in CB 2013, and will be referred to as the ‘elderly’ throughout the blog post. The elderly who are at or above retirement age, but still work, are not included in the present writing. After examining the amounts and sources of income the elderly have, the blog reviews self-assessments of whether that income is enough to cover basic needs.

In all three South Caucasus countries, citizens receive an old age pension, regardless of whether they worked or not. In Armenia and Georgia, the average pension (USD 63 and USD 81, respectively) is close to the official subsistence minimum (USD 65 and USD 79, respectively), while in Azerbaijan the average pension (USD 190) is somewhat higher than the subsistence minimum (USD 160). It should be noted that cost of living is also higher in Azerbaijan. As pensions are close to the subsistence minimums, a very low income level, the economic condition of the elderly is challenging.

According to CB 2013, more than half of the elderly in Armenia and Azerbaijan, and two thirds in Georgia are women, which can be explained by the shorter life expectancy for males. In Azerbaijan and Georgia, more old people live in rural areas than in Armenia, and more than 40% of them in Azerbaijan and Georgia are widowed, compared with 34% in Armenia. Sixteen percent of the elderly in Georgia live alone, compared with 12% in Armenia and 7% in Azerbaijan. It is probably, in part, due to this last finding that elderly household income in Azerbaijan is higher than in other countries – the last month’s household income for more than 70% of Georgian and Armenian elderly was USD 250 or lower, while in Azerbaijan 70% had more than USD 250. Salaries were named as a source of household income by the Azerbaijani elderly more often than in Armenia and Georgia, likely because they are less likely to live alone. Note: The chart only shows the percentage of “Yes” responses for the five most frequently named sources of income.

When asked to rate their households’ economic situation on a ten-point scale, the majority of the elderly in all three countries named middle and low positions – codes “5” or lower. The elderly in Armenia assessed their households’ economic situation worse than in Azerbaijan and Georgia. In Armenia 52% of the elderly state that money is not enough for food while, 26% and 39% in Azerbaijan and Georgia report the same.

The poor economic situation of the elderly is further demonstrated by their need to borrow money for regular expenses. The elderly in all three countries report borrowing money for food, although, Georgians and Azerbaijanis do so less frequently than Armenians. Nearly a third of the elderly in Armenia say they borrow money for food at least monthly, while only 15% in Azerbaijan and Georgia say the same. The elderly in all three countries are less likely to borrow money to pay for utilities than to buy food.

Besides borrowing money for food and utilities, the elderly report limiting their consumption of certain products. Although such limitations are characteristic of all age groups, the elderly are more likely to do so compared to the rest of the population. Most elderly people state that they limit their consumption of meat and fish. Nearly half of Armenia’s elderly say they also limit consumption of butter and milk, while only 21% of Azerbaijanis and 31% of Georgians report the same. Armenians are also much more likely to limit consumption of fish, fruits and vegetables.

Thus, the economic condition of the elderly in the South Caucasus countries is unsatisfactory. Most of the elderly, especially in Armenia, state that their income is not enough for food and utilities. Consequently, they have to borrow money and limit consumption of certain products. This can be considered a cause for concern, especially as the share of the elderly population will increase in the upcoming decades, and the state will face further economic challenges without having worked out those of today.
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