IDEAS home Printed from https://ideas.repec.org/a/fru/finjrn/180501p9-22.html
   My bibliography  Save this article

Economic Effect of Population Ageing and Pension Reforms

Author

Listed:
  • Evsey T. Gurvich

    () (Economic Expert Group, Moscow 109012, Russia; Financial Research Institute, Moscow 127006, Russia)

  • Maria A. Ivanova

    () (Economic Expert Group, Moscow 109012, Russia; Financial Research Institute, Moscow 127006, Russia)

Abstract

The paper considers impact of population ageing on the economic growth and sustainability of pension systems. The analysis demonstrates that ageing has negative effect on the labor force and labor productivity, and thus results in a slowdown of economic growth and an increase of public spending. The most effective policy option is to raise the retirement age, while an increase in contribution rates or other taxes is the worst reaction. This recommendation is relevant for any countries at different stages of aging process, for all types of pension systems, for different demographic scenarios. Simultaneously with the raising of the retirement age, it is necessary to implement the policy aimed at improvement of the human capital quality.

Suggested Citation

  • Evsey T. Gurvich & Maria A. Ivanova, 2018. "Economic Effect of Population Ageing and Pension Reforms," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 127006, Russia, issue 5, pages 9-22, October.
  • Handle: RePEc:fru:finjrn:180501:p:9-22
    DOI: 10.31107/2075-1990-2018-5-9-22
    as

    Download full text from publisher

    File URL: http://www.nifi.ru/images/FILES/Journal/Archive/2018/5/statii/fm_2018_5_01.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Kuhn, Michael & Prettner, Klaus, 2016. "On the long-run growth effect of raising the retirement age," ECON WPS - Vienna University of Technology Working Papers in Economic Theory and Policy 10/2016, Vienna University of Technology, Institute for Mathematical Methods in Economics, Research Group Economics (ECON).
    2. David E. Bloom & David Canning & Günther Fink, 2010. "Implications of population ageing for economic growth," Oxford Review of Economic Policy, Oxford University Press, vol. 26(4), pages 583-612, Winter.
    3. Xiujian Peng & Yinhua Mai, 2013. "Population Ageing, Retirement Age Extension and Economic Growth in China A Dynamic General Equilibrium Analysis," Centre of Policy Studies/IMPACT Centre Working Papers g-237, Victoria University, Centre of Policy Studies/IMPACT Centre.
    4. Anping Chen & Nicolaas Groenewold, 2017. "An increase in the retirement age in China: the regional economic effects," Applied Economics, Taylor & Francis Journals, vol. 49(7), pages 702-721, February.
    5. Vogel, Edgar & Ludwig, Alexander & Bã–Rsch-Supan, Axel, 2017. "Aging and pension reform: extending the retirement age and human capital formation," Journal of Pension Economics and Finance, Cambridge University Press, vol. 16(1), pages 81-107, January.
    6. R. Anton Braun & Daisuke Ikeda & Douglas H. Joines, 2009. "The Saving Rate In Japan: Why It Has Fallen And Why It Will Remain Low," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(1), pages 291-321, February.
    7. Staubli, Stefan & Zweimüller, Josef, 2013. "Does raising the early retirement age increase employment of older workers?," Journal of Public Economics, Elsevier, vol. 108(C), pages 17-32.
    8. Filgueira, Fernando & Manzi, Pilar, 2017. "Pension and income transfers for old age: Inter- and intra-generational distribution in comparative perspective," Políticas Sociales 225, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    9. Nicole Maestas & Kathleen J. Mullen & David Powell, 2016. "The Effect of Population Aging on Economic Growth, the Labor Force and Productivity," NBER Working Papers 22452, National Bureau of Economic Research, Inc.
    10. Beetsma, Roel & Romp, Ward E & van Maurik, Ron, 2017. "What Drives Pension Reform Measures in the OECD? Evidence based on a New Comprehensive Dataset and Theory," CEPR Discussion Papers 12313, C.E.P.R. Discussion Papers.
    11. Ken Tabata, 2015. "Population Aging and Growth: the Effect of PAYG Pension Reform," Discussion Paper Series 125, School of Economics, Kwansei Gakuin University, revised Jan 2015.
    12. Nerlich, Carolin & Schroth, Joachim, 2018. "The economic impact of population ageing and pension reforms," Economic Bulletin Articles, European Central Bank, vol. 2.
    13. Futagami, Koichi & Nakajima, Tetsuya, 2001. "Population Aging and Economic Growth," Journal of Macroeconomics, Elsevier, vol. 23(1), pages 31-44, January.
    14. M. Ivanova & A. Balaev & E. Gurvich., 2017. "Implications of higher retirement age for the labor market," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 3.
    15. Louise Sheiner & Daniel E. Sichel & Lawrence Slifman, 2007. "A primer on the macroeconomic implications of population aging," Finance and Economics Discussion Series 2007-01, Board of Governors of the Federal Reserve System (U.S.), revised 2007.
    16. Galasso, Vincenzo, 2008. "Postponing retirement: the political effect of aging," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 2157-2169, October.
    17. ARTIGE, Lionel & CAVENAILE, Laurent & PESTIEAU, Pierre, 2014. "The macroeconomics of PAYG pension schemes in an aging society," CORE Discussion Papers 2014033, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    18. Nicole Maestas & Kathleen J. Mullen & David Powell, 2016. "The Effect of Population Aging on Economic Growth, the Labor Force and Productivity," NBER Working Papers 22452, National Bureau of Economic Research, Inc.
    19. Keisuke Otsu & Katsuyuki Shibayama, 2016. "Population Aging and Potential Growth in Asia," Asian Development Review, MIT Press, vol. 33(2), pages 56-73, September.
    20. Joaquim Oliveira Martins & Frédéric Gonand & Pablo Antolín & Christine de la Maisonneuve & Kwang-Yeol Yoo, 2005. "The Impact of Ageing on Demand, Factor Markets and Growth," OECD Economics Department Working Papers 420, OECD Publishing.
    21. David Hauner, 2008. "Macroeconomic Effects of Pension Reform in Russia," IMF Working Papers 08/201, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gurvich, E., 2019. "Pension Policy and Population Ageing," Journal of the New Economic Association, New Economic Association, vol. 42(2), pages 177-186.
    2. Danielyan, V. & Polterovich, V., 2019. "The Adventures of Pension Reform in Russia: Where Are the Mistakes?," Journal of the New Economic Association, New Economic Association, vol. 42(2), pages 186-194.

    More about this item

    Keywords

    population ageing; pension reform; retirement age; economic growth;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fru:finjrn:180501:p:9-22. 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: (Gennady Ageev). General contact details of provider: http://edirc.repec.org/data/frigvru.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.