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On The Sustainability of the UK State Pension System in the Light of Population Ageing and Declining Fertility

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  • David Blake
  • Les Mayhew

Abstract

As a result of population ageing and declining fertility, the UK state pension system is unlikely to continue to be able to deliver the current level of pensions without some combination of a higher state pension age and a steady inflow of young immigrant workers from abroad. However, with prudent economic management and continuing economic growth, the need for additional immigrants can be contained and modest real increases in pensions are also a possibility. Higher economic activity rates among older people, including deferred retirement, will to some extent compensate but not eliminate these pressures. If fertility picks up over the next few years, this will also help, but not until after 2030. Copyright 2006 Royal Economic Society.

Suggested Citation

  • David Blake & Les Mayhew, 2006. "On The Sustainability of the UK State Pension System in the Light of Population Ageing and Declining Fertility," Economic Journal, Royal Economic Society, vol. 116(512), pages 286-305, June.
  • Handle: RePEc:ecj:econjl:v:116:y:2006:i:512:p:f286-f305
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    Cited by:

    1. Kravdal, Øystein, 2016. "Expected and unexpected consequences of childbearing – a methodologically and politically important distinction that is overlooked," Memorandum 05/2016, Oslo University, Department of Economics.
    2. Øystein Kravdal, 2014. "The Estimation of Fertility Effects on Happiness: Even More Difficult than Usually Acknowledged," European Journal of Population, Springer;European Association for Population Studies, vol. 30(3), pages 263-290, August.
    3. Muñoz de Bustillo, Rafael & Antón, José-Ignacio, 2009. "Immigration and Social Benefits in a Mediterranean Welfare State: The Case of Spain," MPRA Paper 13849, University Library of Munich, Germany.
    4. Federico Ciliberto & Amalia R. Miller & Helena Skyt Nielsen & Marianne Simonsen, 2016. "Playing The Fertility Game At Work: An Equilibrium Model Of Peer Effects," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57, pages 827-856, August.
    5. Mauricio Arias & Juan Carlos Mendoza, "undated". "Un modelo de simulación del Régimen Pensional de Ahorro Individual con Solidaridad en Colombia," Temas de Estabilidad Financiera 044, Banco de la Republica de Colombia.
    6. Javier Vazquez Grenno, 2010. "Spanish pension system: Population aging and immigration policy," Hacienda Pública Española, IEF, vol. 195(4), pages 37-64, december.
    7. Gurgen Aslanyan, 2014. "The migration challenge for PAYG," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(4), pages 1023-1038, October.
    8. Attias, Anna & Arezzo, Maria Felice & Pianese, Augusto & Varga, Zoltan, 2016. "A comparison of two legislative approaches to the pay-as-you-go pension system in terms of adequacy. The Italian case," Insurance: Mathematics and Economics, Elsevier, vol. 68(C), pages 203-211.
    9. Martin Stepanek, 2017. "Pension Reforms and Adverse Demographics: The Case of the Czech Republic," Working Papers IES 2017/15, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Aug 2017.
    10. Kravdal, Øystein, 2013. "Reflections on the Search for Fertility Effects on Happiness," Memorandum 10/2013, Oslo University, Department of Economics.
    11. Rosa Aísa & Fernando Pueyo & Marcos Sanso, 2012. "Life expectancy and labor supply of the elderly," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(2), pages 545-568, January.
    12. Lijian Wang & Daniel Béland, 2014. "Assessing the Financial Sustainability of China’s Rural Pension System," Sustainability, MDPI, Open Access Journal, vol. 6(6), pages 1-20, May.
    13. Gurgen Aslanyan, 2012. "Migration Challenge for PAYG," FIW Working Paper series 101, FIW.
    14. Luca Gori & Mauro Sodini, 2011. "Nonlinear Dynamics in an OLG Growth Model with Young and Old Age Labour Supply: The Role of Public Health Expenditure," Computational Economics, Springer;Society for Computational Economics, vol. 38(3), pages 261-275, October.
    15. Nancy Quinceno Cárdenas, 2014. "Modelación basada en agentes en el sistema pensional colombiano. Una aproximación desde el mercado laboral y la dinámica poblacional," REVISTA CIFE, UNIVERSIDAD SANTO TOMÁS, September.
    16. Øystein Kravdal, 2010. "Demographers’ interest in fertility trends and determinants in developed countries: Is it warranted?," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 22(22), pages 663-690, April.
    17. repec:spr:chfecr:v:5:y:2017:i:1:d:10.1186_s40589-017-0053-3 is not listed on IDEAS
    18. repec:sek:jijoes:v:6:y:2017:i:2:p:82-99 is not listed on IDEAS

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