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Actuarial Neutrality across Generations Applied to Public Pensions under Population Ageing: Effects on Government Finances and National Saving

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  • Oksanen, Heikki

Abstract

In welfare states, collective saving has declined to a persistently negative level, while reduced fertility and increasing longevity are leading to increasing pension liabilities. Actuarial neutrality across generations is presented as a benchmark for designing pension reforms to meet the challenges of population ageing. It is shown that this condition can be respected by a wide range of pension reforms, with very different consequences for public finance target setting. The rules for public pensions in national accounting are also discussed. Finally, the combined effects of population ageing and public pension rules on national saving are discussed.

Suggested Citation

  • Oksanen, Heikki, 2006. "Actuarial Neutrality across Generations Applied to Public Pensions under Population Ageing: Effects on Government Finances and National Saving," Discussion Paper 284, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:piedp1:284
    Note: The Second International Workshop on the Balance Sheet of Social Security Pensions, Hitotsubashi Collaboration Center, Tokyo, 15 December, 2005
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    File URL: https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/14173/pie_dp284.pdf
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    References listed on IDEAS

    as
    1. Börsch-Supan, Axel H. & Jens Köke, F. & Winter, Joachim K., 2005. "Pension reform, savings behavior, and capital market performance," Journal of Pension Economics and Finance, Cambridge University Press, vol. 4(1), pages 87-107, March.
    2. Salvador Valdés-Prieto, 2005. "Securitization of taxes implicit in PAYG pensions [‘The Hungarian Pension System Before and After the 1998 Reform’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 20(42), pages 216-265.
    3. Heikki Oksanen, 2005. "Actuarial Neutrality across Generations Applied to Public Pensions under Population Ageing: Effects on Government Finances and National Saving," CESifo Working Paper Series 1501, CESifo.
    4. repec:oup:ecpoli:v:20:y:2005:i:42:p:215-265 is not listed on IDEAS
    5. Heikki Oksanen, 2005. "Actuarial neutrality across generations applied to public pensions under population ageing: effects on government finances and national saving," European Economy - Economic Papers 2008 - 2015 230, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
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    Citations

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    Cited by:

    1. Roel Beetsma & Heikki Oksanen, 2008. "Pensions under Ageing Populations and the EU Stability and Growth Pact ," CESifo Economic Studies, CESifo, vol. 54(4), pages 563-592, December.
    2. Heikki Oksanen, 2009. "Setting targets for government budgets in the pursuit of intergenerational equity," European Economy - Economic Papers 2008 - 2015 358, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    3. Roel M. W. J. Beetsma & A. Lans Bovenberg, 2009. "Pensions and Intergenerational Risk‐sharing in General Equilibrium," Economica, London School of Economics and Political Science, vol. 76(302), pages 364-386, April.
    4. Beetsma, Roel M.W.J. & Bovenberg, A. Lans & Romp, Ward E., 2011. "Funded pensions and intergenerational and international risk sharing in general equilibrium," Journal of International Money and Finance, Elsevier, vol. 30(7), pages 1516-1534.
    5. R. Beetsma & A. L. Bovenberg, 2006. "Pension systems, intergenerational risk sharing and inflation," European Economy - Economic Papers 2008 - 2015 257, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    6. Roel Beetsma & Heikki Oksanen, 2007. "Pension Systems, Ageing and the Stability and Growth Pact," CESifo Working Paper Series 2141, CESifo.

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    More about this item

    Keywords

    pensions; actuarial neutrality; public debt; national accounts;
    All these keywords.

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H6 - Public Economics - - National Budget, Deficit, and Debt

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