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Long-Term Fiscal Effects of Public Pension Reform in Norway – A Generational Accounting Analysis

Author

Listed:
  • Christian Hagist

    (Research Center for Generational Contracts, Freiburg University, Germany.)

  • Bernd Raffelhüschen

    (Research Center for Generational Contracts, Freiburg University, Germany.)

  • Alf Erling Risa

    (Department of Economics, University of Bergen, Norway.)

  • Erling Vårdal

    (Department of Economics, University of Bergen, Norway.)

Abstract

"Generational accounts" measure the fiscal sustainability of the public sector. We ask whether contributions from the Government Pension Fund and remaining oil and gas wealth in the ground, together with the pension reform taking effect in 2011, are sufficiently large to secure generational balance in Norway. Our results show that the pension reform has a substantial effect, and contributes as much to generational balance as the total petroleum wealth. Structural characteristics of higher employment and lower transfer payments typical for cyclical upturns improve the GAs substantially. Optimistic assumptions regarding these structural characteristics do not remove the need for further reforms to obtain fiscal sustainability of the Norwegian public sector.

Suggested Citation

  • Christian Hagist & Bernd Raffelhüschen & Alf Erling Risa & Erling Vårdal, 2013. "Long-Term Fiscal Effects of Public Pension Reform in Norway – A Generational Accounting Analysis," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 38, pages 1-2.
  • Handle: RePEc:noj:journl:v:37:y:2013:p:2
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    References listed on IDEAS

    as
    1. Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1991. "Generational Accounts: A Meaningful Alternative to Deficit Accounting," NBER Chapters,in: Tax Policy and the Economy, Volume 5, pages 55-110 National Bureau of Economic Research, Inc.
    2. Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1992. "Social Security and Medicare Policy from the Perspective of Generational Accounting," NBER Chapters,in: Tax Policy and the Economy, Volume 6, pages 129-145 National Bureau of Economic Research, Inc.
    3. Carl E. Gjersem, 2002. "A presentation of Generational Accounting in Norway," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 28, pages 61-73.
    4. Erling Holmøy & Kyrre Stensnes, 2008. "Will the Norwegian pension reform reach its goals? An integrated micro-macro assessment," Discussion Papers 557, Statistics Norway, Research Department.
    5. Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff & Erling Steigum, 1993. "Generational accounting in Norway: is the nation overconsuming its petroleum wealth?," Working Paper 9305, Federal Reserve Bank of Cleveland.
    6. Ulrich Benz & Stefan Fetzer, 2006. "Indicators for Measuring Fiscal Sustainability: A Comparison of the OECD Method and Generational Accounting," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 62(3), pages 367-391, September.
    7. Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1994. "Generational Accounting: A Meaningful Way to Evaluate Fiscal Policy," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 73-94, Winter.
    8. Marit Rønsen, 2004. "Fertility and family policy in Norway - A reflection on trends and possible connections," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 10(10), pages 265-286, June.
    9. Erling Steigum, Jr & Carl Gjersem & Willi Leibfritz, 1999. "Generational Accounting and Depletable Natural Resources: The Case of Norway," NBER Chapters,in: Generational Accounting around the World, pages 369-396 National Bureau of Economic Research, Inc.
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    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

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