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Financial Outlook for the Pension System and the Standard of Living of Pensioners by 2070

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  • Frédérique Nortier-Ribordy

Abstract

[eng] The outlook for changes in the share of pension expenditure in GDP depends heavily on assumptions of future productivity. If labour productivity were to increase by an average of 1.6% per year, the ratio of pension expenditure to GDP would be stable or decreasing from 2032, to settle at 12.1% in 2070, compared to 14.7% if productivity were to increase by only 0.7%. This stability or even decrease in the share of pension expenditure may seem counter-intuitive in view of the expected ageing of the population. The increase in the retirement age from 62 to 64, as a result of reforms adopted, and the smaller increase in pensions compared to earned income would, in effect, counterbalance this ageing. The standard of living of pensioners would thus be between 75.5% and 87.2% of the standard of living of the whole population in 2070, whereas it has been broadly equivalent since the early 2000s.

Suggested Citation

  • Frédérique Nortier-Ribordy, 2023. "Financial Outlook for the Pension System and the Standard of Living of Pensioners by 2070," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 538, pages 89-105.
    • Handle: RePEc:nse:ecosta:ecostat_2023_538_6
    DOI: https://doi.org/10.24187/ecostat.2023.538.2094
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    References listed on IDEAS

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    1. N.Bechichi & M. Fabre & T. Olivia, 2022. "Projections de la population active à l’horizon 2080," Documents de Travail de l'Insee - INSEE Working Papers 2022-06, Institut National de la Statistique et des Etudes Economiques.
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      More about this item

      JEL classification:

      • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
      • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
      • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
      • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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