Demographic changes have aroused considerable anxiety in transition countries, affecting fiscal policy, labor markets, investment and savings behavior.

Montenegro faces an aging population, falling fertility rates, low income per capita, low savings rate and a national budget constrained by fiscal deficits, escalating social costs, and foreign debt service problem. Devising a viable solution for the economic and social welfare of current and future generations is critical

Keywords: Aging, Labor market structure, Fiscal policy, Economic Growth