Aging, social security design, and capital accumulation

[en] This paper analyzes the impact of demographic aging on capital accumulation and welfare in economies with unfunded pensions. By using a two-period overlapping generations model with potentially endogenous retirement decisions, it shows that both the type of aging, i.e. declining fertility or increasing longevity, and the type of pension system, i.e. defined contributions or defined benefits, are important in understanding this impact. Results show that when aging is driven by an increasing longevity, unregulated retirement age systems lead to greater improvements in welfare. In contrast, with a decreasing fertility, mandatory retirement systems with defined contributions fare better. © 2016 Elsevier B.V.

Disciplines :

Economic systems & public economics

Author, co-author :

Dedry, A.; University of Liege, Department of Economics, Belgium

Onder, H.; Macroeconomics and Fiscal Management Global Practice, The World Bank, United States

Pestieau, Pierre ; Université de Liège - ULiège > HEC Liège > HEC Liège

Language :

English

Title :

Aging, social security design, and capital accumulation

Publication date :

2017

Journal title :

Journal of the Economics of Ageing

ISSN :

2212-828X

eISSN :

2212-8298

Publisher :

Elsevier B.V.

Volume :

Pages :

145-155

Peer reviewed :

Peer Reviewed verified by ORBi

Available on ORBi :

since 24 September 2021

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