Ageing, demographic risks, and pension reform

Arbeitspapier

Ageing will increase pension expenditure and contribution rates. There is also increasing awareness that the risks connected to mortality, fertility, and migration are considerable. In pension reforms one must decide how these risks are to be shared between workers and pensioners, and also take into account that in the transition phases different cohorts may gain or lose. We discuss the risk-sharing and intergenerational distribution aspects of three pension policy measures that either have already been adopted or are being proposed in Sweden and Finland. Each of these methods, linking benefits to life expectancy, indexing benefits to the total wage bill, and using fertility-dependent prefunding, has its own advantages and weaknesses. Using a numerical OLG model, and realisations from stochastic population simulations, we demonstrate that these methods greatly enhance the sustainability of a pension system in unfavourable demographic outcomes but have practically no effects if the demographics remain stable. Thus the allocation of risks can be improved without fundamentally changing the systems.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: ETLA Discussion Papers ; No. 765

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Social Security and Public Pensions ; Demographic Trends, Macroeconomic Effects, and Forecasts
• Thema: Demographic uncertainty ; pension benefits ; longevity adjustment ; indexing ; partial prefunding ; voting ; Bevölkerungsentwicklung ; Rentenreform ; Lohnniveau ; Simulation ; Finnland ; Alternde Bevölkerung

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Lassila, Jukka ; Valkonen, Tarmo
• Ereignis: Veröffentlichung
• (wer): The Research Institute of the Finnish Economy (ETLA)
• (wo): Helsinki
• (wann): 2001

Weitere Informationen

• Handle: http://hdl.handle.net/10419/63868
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ