Stabilizing pay-as-you-go pension schemes in the face of rising longevity and falling fertility: an application to the Netherlands
AbstractRising longevity and falling fertility threaten the sustainability of pay-as-you-go pension schemes. This paper shows that maintaining the intergenerational balance in the Dutch pay-as-you-go pension scheme in the face of increased longevity since the introduction of the scheme in 1957 would have required a gradual increase of the retirement age to at least 68 years for the generation born in 1945. Furthermore, we show that projected increases in labour-force participation rates do not generate sufficient additional tax revenues to subsitute for the dearth of human capital caused by falling fertility rates.
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Bibliographic InfoPaper provided by Netherlands Central Bank, Research Department in its series DNB Working Papers with number 220.
Date of creation: Aug 2009
Date of revision:
public pension; pay-as-you-go system;
Find related papers by JEL classification:
- H5 - Public Economics - - National Government Expenditures and Related Policies
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