Europeans are living longer, and fewer now remain in the labour force as they grow older. Many European countries have responded to these pressures by reforming their public pension systems. There is considerable uncertainty as to the effects of these reforms — as they typically do not alter the unfunded nature of public pension arrangements — and this uncertainty is itself costly. Not only does it undermine the credibility of public pension programmes inducing people to retire early, but it also distorts savings behaviour and capital accumulation.
KeywordsPension System Forecast Horizon Public Pension Private Pension European Community Household Panel
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