Labour market characteristics and the burden of ageing : North America versus Europe
AbstractA transition from pay-as-you-go pension systems to more private funded systems is often suggested as a solution to finance pension systems threatened by ageing. This paper analyses alternative potential remedies linked to changes in labour market characteristics, within an international computable overlapping-generations model of the world economy. A prolongation of the working life of skilled or unskilled individuals, an increase in the demand of skills, a rise in the education levels and increased skilled or unskilled immigration have very different outcomes in North-America and in Europe. In the latter region, a postponement in the retirement age of unskilled individuals has the most beneficial effect in relieving the fiscal pressure on pensions systems, because the proportion of unskilled workers is relatively larger in Europe than in North-America. In North-America, where skilled labour is more abundant, an acceleration in skill-biased technical change has the biggest impact on pensions systems, as it raises the productivity of skilled workers.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Département des Sciences Economiques in its series Discussion Papers (ECON - Département des Sciences Economiques) with number 2008001.
Date of creation: 01 Feb 2008
Date of revision:
OLG-CGE Model; ageing; labour market; migration;
Find related papers by JEL classification:
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
This paper has been announced in the following NEP Reports:
- NEP-AGE-2008-03-15 (Economics of Ageing)
- NEP-ALL-2008-03-15 (All new papers)
- NEP-CMP-2008-03-15 (Computational Economics)
- NEP-EEC-2008-03-15 (European Economics)
- NEP-LAB-2008-03-15 (Labour Economics)
- NEP-MIG-2008-03-15 (Economics of Human Migration)
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- Thomas Gries & Stefan Jungblut & Tim Krieger & Henning Meier, 2009. "Statutory Retirement Age and Lifelong Learning," Working Papers CIE 9, University of Paderborn, CIE Center for International Economics.
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