Chapter 4: Pensions and Children
This chapter is a primer of key economic issues in the reform of pension systems in the EU. The chapter begins with an overview on the strains on European pension systems that loom ahead as a result of the ageing populations in the EU countries. The old-age dependency ratios are forecasted to grow to very high levels, which has major fiscal implications, as the pension system is, to a large extent, a part of the public sector. The chapter discusses principles for reforms of the pension systems that are needed to fix the emerging budget problems and to improve efficiency. The strain can be relieved to some extent by increasing the retirement age and lowering pension benefits, as well as by adopting more general structural policies that enhance economic growth. Our key recommendation is to add a funded pillar to the existing pay-as-you-go systems, to mitigate the missing human capital (due to ageing) by adding incentives for real capital formation. Moreover, the pay-as-you-go pension could be differentiated according to the number of children, provided individually tailored savings plans for the funded pillar are designed to ensure a sufficient level of overall pensions for the childless.
Volume (Year): (2005)
Issue (Month): (03)
|Contact details of provider:|| Postal: |
Phone: +49 (89) 9224-0
Fax: +49 (89) 985369
Web page: http://www.cesifo-group.de
More information through EDIRC
References listed on IDEAS
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.:
- 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.
- Hans-Werner Sinn, 2005. "Europe’s Demographic Deficit A Plea For A Child Pension System," De Economist, Springer, vol. 153(1), pages 1-45, December.
- Robert Fenge & Martin Werding, 2003. "Ageing and Fiscal Imbalances Across Generations: Concepts of Measurement," CESifo Working Paper Series 842, CESifo Group Munich.
- Bernard Casey & Howard Oxley & Edward R. Whitehouse & Pablo Antolín & Romain Duval & Willi Leibfritz, 2003. "Policies for an Ageing Society: Recent Measures and Areas for Further Reform," OECD Economics Department Working Papers 369, OECD Publishing.
- Sinn, Hans-Werner, 2000.
"Why a Funded Pension System is Useful and Why It is Not Useful,"
Munich Reprints in Economics
19859, University of Munich, Department of Economics.
- Hans-Werner Sinn, 2000. "Why a Funded Pension System is Useful and Why It is Not Useful," NBER Working Papers 7592, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:ces:eeagre:v::y:2005:i::p:69-101. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.