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Demography Rules in Pension Systems

  • Marek Góra
Chapter
Part of the The Springer Series on Demographic Methods and Population Analysis book series (PSDE, volume 32)

Abstract

Traditional pension systems were established under assumptions similar to the trick behind the Ponzi scheme: each next generation of participants is much larger than the previous one. That created a surplus at the disposal of politicians, who were able to finance social expenditure out of that demographic dividend. Phase 4 of the demographic transition stopped that possibility. It is extremely difficult to reduce inflated expectations after the dividend has gone. This applies not only to pension systems but also to public finance in general.

The chapter briefly discusses that situation and also addresses common myths in the discussion on pension reforms. Demography rules and real pension reform is just adjusting institutions to the changing reality, which is one of the greatest challenges developed economies face nowadays.

Keywords

Productivity Growth Contribution Rate Total Fertility Rate Pension System Pension Scheme 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

References

  1. Barr, N. (2002, April–June). Reforming pensions: Myths, truths, and policy choices. International Social Security Review, 55(2), 3–36.CrossRefGoogle Scholar
  2. Barr, N., & Diamond, P. (2006). The economics of pensions. Oxford Review of Economic Policy, 22, 1.CrossRefGoogle Scholar
  3. ECFIN. (2009). Sustainability report 2009. European Economy, 9.Google Scholar
  4. Góra, M. (2003). Reintroducing intergenerational equilibrium: Key concepts behind the new Polish pension system (William Davidson Institute Working Paper 574).Google Scholar

Copyright information

© Springer Science+Business Media Dordrecht. 2013

Authors and Affiliations

  1. 1.Warsaw School of Economics (SGH)WarsawPoland

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