Why are urban pensioners increasing and rural pensioners shrinking? - Factors/ From internal migration to informality in the labor market
Urban centers have a much higher and growing number of pensioners, while the complete opposite is happening in villages, where the number of elderly people benefiting from rural pensions is falling at a high rate, reaching the lowest historical level in 2024. In the 5-year period, from 2020 to 2024, the number of urban old-age pensions has increased by 84,842 beneficiaries, while the number of rural pensions has decreased by 24,187 beneficiaries.
But what are the reasons? According to experts, one of the main reasons is internal migration from the countryside to the city. And this is the case since the 1990s, when a very large part of the Albanian population has moved from rural areas to cities (Tirana, Durrës, Vlorë, Shkodër, etc.). These people are employed and insured in the city and for this reason, when they retire, they are counted as urban pensioners. On the contrary, the rural population has shrunk, because many residents have left or have not been insured at all.
At this point, it turns out that there are more pensioners in the city because the number of insured residents there increased and fewer pensioners in the countryside because the active and contributing rural population decreased.
Another factor is the informal economy. While in urban areas, formal employment, through which social security is declared and paid, is much higher, in rural areas, for decades, employment in agriculture has been informal or with minimal contributions. This means that many people who have worked in the countryside do not meet the legal conditions for pensions, and therefore do not enter the statistics of pensioners at all. The government is trying to change this phenomenon by encouraging farmers to formalize themselves as a condition for benefiting from subsidy schemes in agriculture, which in the future may lead to an increase in the number of pensioners in the countryside.
The abandonment of villages by young people is another factor that directly affects the scheme and future pension benefits. Many young people from villages have emigrated abroad or to urban areas, leaving behind an increasingly aging rural population. As a result, there are no longer enough contributors in rural areas to create new pensions. Many elderly people who lived in villages have passed away, while the younger generations are not entering the rural pension scheme. This causes the number of rural pensioners to decline every year, because they are not being replaced by the next generation.
The new administrative-territorial map has also brought a configuration of the number of pensioners. Many areas that were previously considered rural, after the territorial reform of 2025 are administratively urban areas. This changes the statistical definition: many pensioners who were previously counted as “rural” now appear as “urban”, even though the level of pension they receive may be low.
On the other hand, better services in urban centers and access to healthcare, medications, and social care mean that life expectancy is higher in cities, which also affects the higher number of pensioners.
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