Demographic Changes and the Pension Problem: evidence from twelve countries

Abstract

In all industrialized countries, there have been growing fears that the future ageing of the population challenges existing public pension systems. This has led to a heated debate with demography in the foreground, and to numerous and controversial reform proposals. This chapter reports on an international comparative study carried out at IIASA which addresses the major demographic aspects of the pension problem in a systematic way. Is ageing certain? Are fertility or migration a possible demographic answer to ageing? What will be the impact of ageing on average benefits? How much would it cost to maintain pensions at the present level? Would an increase in women’s activity help solving the problem? Is a rise in age at retirement the key variable? Would a saving-type pension system perform better than the existing pay-as-you-go? What can be gained from burden-sharing between actives and retirees? Is an increase in productivity the miracle solution? These are the main questions to which quantitative answers are given.

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