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Demography, the cost of pensions and the move to pension funds

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  • Pierre Concialdi

Abstract

This article analyses the consequences of the so-called 'ageing' of the population on the level of public pension expenditure. It provides detailed figures for all countries of the European Union, with a distinction between former member States and new member States. The article first shows that there is a great heterogeneity across European countries concerning the size of this demographic change. It also provides a detailed analysis of various dependency ratios. The main conclusion of this analysis is that the economic impact of structural changes that European Countries will face in the future is not as bad as the use of rather simplistic dependency ratios would have us believe. Assuming a reasonable economic growth, the financing of pensions is affordable and will not create an impossible burden for the economy. However, the distribution of the annual increase in economic resources between the economically active population and the overall dependent population will change to a significant extent. This is mainly a political issue that would require a full debate.

Suggested Citation

  • Pierre Concialdi, 2006. "Demography, the cost of pensions and the move to pension funds," Review of Political Economy, Taylor & Francis Journals, vol. 18(3), pages 301-315.
    • Handle: RePEc:taf:revpoe:v:18:y:2006:i:3:p:301-315
    DOI: 10.1080/09538250600797735
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    References listed on IDEAS

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    1. Robert Holzmann & Joseph E. Stiglitz, 2001. "New Ideas about Old Age Security : Toward Sustainable Pension Systems in the 21st Century," World Bank Publications - Books, The World Bank Group, number 13857, December.
    2. Sergio Cesaratto, 2005. "Pension Reform and Economic Theory," Books, Edward Elgar Publishing, number 2081.
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    1. repec:zbw:rwirep:0238 is not listed on IDEAS
    2. Jopp, Tobias Alexander, 2011. "Old Times, Better Times? German Miners' Knappschaften, Pay-as-you-go Pensions, and Implicit Rates of Return, 1854–1913," Ruhr Economic Papers 238, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    3. Tobias A. Jopp, 2011. "Old Times, Better Times? German Miners’ Knappschaften, Pay-as-you-go Pensions, and Implicit Rates of Return, 1854–1913," Ruhr Economic Papers 0238, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

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