Ageing and Fiscal Imbalances Across Generations: Concepts of Measurement
AbstractIn the literature, several approaches have been taken to measure the impact of demographic ageing on public pension schemes, with particular attention being paid to potential fiscal imbalances across the generations involved in demographic transition. In this paper, we review three of these measures - viz., “net pension liabilities” and “general government fiscal balances” as suggested by the OECD, as well as “generational accounting” in the Auerbach- Kotlikoff tradition. We show how these approaches are related to each other by the general idea that unfunded pensions create an implicit public debt, and we discuss the problems involved in applying and interpreting them in a real-world context. In addition, we suggest the “implicit tax” entailed in public pensions as a further concept for measuring the inter-generational distribution of burdens arising in ageing populations. The notion of an implicit tax is straightforward from simple pension algebra; it is easy to interpret in a theoretical perspective; and it can be introduced to various kinds of applied work using micro-level data.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 842.
Date of creation: 2003
Date of revision:
demographic ageing; public pensions; fiscal policy; inter-generational redistribution; measurement;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-05-02 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hans-Werner Sinn & Martin Werding, 2000. "Rentenniveausenkung und Teilkapitaldeckung - ifo Empfehlungen zur Konsolidierung des Umlageverfahrens," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 53(18), pages 12-25, 06.
- Hans-Werner Sinn, 1997.
"The Value of Children and Immigrants in a Pay-As-You-Go Pension System: A Proposal for a Partial Transition to a Funded System,"
NBER Working Papers
6229, National Bureau of Economic Research, Inc.
- Sinn, Hans-Werner, 1997. "The Value of Children and Immigrants in a Pay-As-You-Go Pension System: A Proposal For a Partial Transition to a Funded System," CEPR Discussion Papers 1734, C.E.P.R. Discussion Papers.
- Laurence J. Kotlikoff & Willi Leibfritz, 1998.
"An International Comparison of Generational Accounts,"
NBER Working Papers
6447, National Bureau of Economic Research, Inc.
- Laurence J. Kotlikoff & Willi Leibfritz & Willi Leibfritz, 1999. "An International Comparison of Generational Accounts," NBER Chapters, in: Generational Accounting around the World, pages 73-102 National Bureau of Economic Research, Inc.
- Jonathan Gruber & David Wise, 1997. "Social Security Programs and Retirement Around the World: Introduction and Summary of Papers by..," NBER Working Papers 6134, National Bureau of Economic Research, Inc.
- Robert Haveman, 1994. "Should Generational Accounts Replace Public Budgets and Deficits?," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 95-111, Winter.
- Willi Leibfritz & Deborah Roseveare & Douglas Fore & Eckhard Wurzel, 1995. "Ageing Populations, Pension Systems and Government Budgets: How Do They Affect Saving?," OECD Economics Department Working Papers 156, OECD Publishing.
- Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1991.
"Generational Accounts: A Meaningful Alternative to Deficit Accounting,"
in: Tax Policy and the Economy, Volume 5, pages 55-110
National Bureau of Economic Research, Inc.
- Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1991. "Generational accounts: a meaningful alternative to deficit accounting," Working Paper 9103, Federal Reserve Bank of Cleveland.
- Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1991. "Generational Accounts - A Meaningful Alternative to Deficit Accounting," NBER Working Papers 3589, National Bureau of Economic Research, Inc.
- Robert Holzmann & Robert Palacios & Asta Zviniene, 2001. "On the Economics and Scope of Implicit Pension Debt: An International Perspective," Empirica, Springer, vol. 28(1), pages 97-129, March.
- Martin Werding & Harald Blau, 2002. "Auswirkungen des demographischen Wandels auf die staatlichen Alterssicherungssysteme : Modellrechnungen bis 2050," ifo Beiträge zur Wirtschaftsforschung, Ifo Institute for Economic Research at the University of Munich, number 8.
- Bernd Raffelhuschen & Laurence J. Kotlikoff, 1999.
"Generational Accounting around the Globe,"
American Economic Review,
American Economic Association, vol. 89(2), pages 161-166, May.
- Kotlikoff, L.J. & Raffelhuschen, B., 1999. "Generational Accounting around the Globe," Norway; Department of Economics, University of Bergen 195, Department of Economics, University of Bergen.
- Robin Brooks, 2000. "What Will Happen To Financial Markets When The Baby Boomers Retire?," Computing in Economics and Finance 2000 92, Society for Computational Economics.
- Robin Brooks, 2000. "What Will Happen to Financial Markets When the Baby Boomers Retire?," IMF Working Papers 00/18, International Monetary Fund.
- repec:fth:eeccco:110 is not listed on IDEAS
- N. A. Barr, 2000. "Reforming Pensions," IMF Working Papers 00/139, International Monetary Fund.
- Sheetal K. Chand & Albert Jaeger, 1996. "Aging Populations and Public Pension Schemes," IMF Occasional Papers 147, International Monetary Fund.
- Hans Fehr & Laurence J. Kotlikoff & Willi Leibfritz, 1999.
"Generational Accounting in General Equilibrium,"
in: Generational Accounting around the World, pages 43-72
National Bureau of Economic Research, Inc.
- Homburg, Stefan & Richter, Wolfram, 1990. "Eine effizienzorientierte Reform der GRV," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 183-191..
- Koch, Daniel, 2011. "Wirksame Begrenzung von Staatsverschuldung auf europäischer Ebene," Wirtschaftswissenschaftliche BeitrÃ¤ge 114, Julius-Maximilians-Universität Würzburg, Lehrstuhl für Volkswirtschaftslehre, insbes. Wirtschaftsordnung und Sozialpolitik.
- Robert Fenge & Martin Werding, 2003.
"Ageing and the Tax Implied in Public Pension Schemes: Simulations for Selected OECD Countries,"
CESifo Working Paper Series
841, CESifo Group Munich.
- Robert Fenge & Martin Werding, 2004. "Ageing and the tax implied in public pension schemes: simulations for selected OECD countries," Fiscal Studies, Institute for Fiscal Studies, vol. 25(2), pages 159-200, June.
- Carlos Vidal-Meli� & María del Carmen Boado-Penas, 2013. "Compiling the actuarial balance for pay-as-you-go pension systems. Is it better to use the hidden asset or the contribution asset?," Applied Economics, Taylor & Francis Journals, vol. 45(10), pages 1303-1320, April.
- Werding, Martin, 2006. "Implicit Pension Debt and the Role of Public Pensions for Human Capital Accumulation: An Assessment for Germany," Discussion Paper 283, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
- Kilponen , Juha & Kinnunen , Helvi & Ripatti , Antti, 2006. "Population ageing in a small open economy – some policy experiments with a tractable general equilibrium model," Research Discussion Papers 28/2006, Bank of Finland.
- Martin Werding, 2007. "Versicherungsmathematisch korrekte Rentenabschläge für die gesetzliche Rentenversicherung," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 60(16), pages 19-32, 08.
- Heikki Oksanen, 2004. "Public Pensions in the national accounts and public finance targets," European Economy - Economic Papers 207, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
- Knell, Markus, 2010. "How automatic adjustment factors affect the internal rate of return of PAYG pension systems," Journal of Pension Economics and Finance, Cambridge University Press, vol. 9(01), pages 1-23, January.
- Gabriele Semeraro, 2007. "Should financial accounts include future pension liabilities," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Proceedings of the IFC Conference on "Measuring the financial position of the household sector", Basel, 30-31 August 2006 - Volume 1, volume 25, pages 179-198 Bank for International Settlements.
- Lars Calmfors & Giancarlo Corsetti & Seppo Honkapohja & John Kay & Willi Leibfritz & Gilles Saint-Paul & Hans-Werner Sinn & Xavier Vives, 2005. "Chapter 4: Pensions and Children," EEAG Report on the European Economy, CESifo Group Munich, vol. 0, pages 69-101, 03.
- Martin Werding, 2006. "Kinderrente und Vorsorgepflicht - der ifo-Vorschlag zur Lösung der demographischen Krise des Rentensystems," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 59(07), pages 44-53, 04.
- Martin Werding, 2005. "Survivor Benefits and the Gender Tax Gap in Public Pension Schemes: Observations from Germany," CESifo Working Paper Series 1596, CESifo Group Munich.
- Knell, Markus, 2013. "The Intergenerational Distribution of Demographic Fluctuations in Unfunded and Funded Pension Systems," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79830, Verein für Socialpolitik / German Economic Association.
- Juha Kilponen & Helvi Kinnunen & Antti Ripatti, 2006. "Demographic Uncertainty and Labour Market Imperfections in Small Open Economy," Computing in Economics and Finance 2006 227, Society for Computational Economics.
- Martin Werding, 2005. "Survivor Benefits and the Gender Tax-Gap inPublic Pension SchemesWork Incentives and Options for Reform," Ifo Working Paper Series Ifo Working Paper No. 7, Ifo Institute for Economic Research at the University of Munich.
- Rydell, Ingrid, 2005. "Equity, Justice, Interdependence: Intergenerational Transfers and the Ageing Population," Arbetsrapport 2005:5, Institute for Futures Studies.
- Heikki Oksanen, 2004. "Public Pensions in the National Accounts and Public Finance Targets," CESifo Working Paper Series 1214, CESifo Group Munich.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra).
If references are entirely missing, you can add them using this form.