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Paying for pensions: how important is economic growth?

Author

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  • Ignazio Visco

    () (OECD, Paris (France))

Abstract

This paper focuses on the scope for a higher level of output and faster productivitygrowth to ease future fiscal pressures stemming from demographic developments in OECD countries over the next fifty years. After concluding that, without substantial reforms, pressure on government spending linked to ageing populations (both onpensions and health expenditures), will in general result in significant increases in expenditures to GDP ratios, the paper examines how these pressures might be redressed. Responses which focus on achieving an increase in the average number of years individuals spend active in the labour force and raising the level as well as widening the sources of individual provision of retirement income are recommended. Increasing output (through lower structural unemployment and higher female and elderly workers' participation rates) and its rate of growth (through gains in productivity) are seen as offering a complementary, though limited, response.

Suggested Citation

  • Ignazio Visco, 2001. "Paying for pensions: how important is economic growth?," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 54(216), pages 73-102.
  • Handle: RePEc:psl:bnlaqr:2001:13
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    File URL: http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/9929/9811
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    References listed on IDEAS

    as
    1. Willi Leibfritz & Deborah Roseveare & Douglas Fore & Eckhard Wurzel, 1995. "Ageing Populations, Pension Systems and Government Budgets: How Do They Affect Saving?," OECD Economics Department Working Papers 156, OECD Publishing.
    2. Dave Turner & Claude Giorno & Alain de Serres & Ann Vourc'h & Pete Richardson, 1998. "The Macroeconomic Implications of Ageing in a Global Context," OECD Economics Department Working Papers 193, OECD Publishing.
    3. Ketil Hviding & Marcel Mérette, 1998. "Macroeconomic Effects of Pension Reforms in The Context of Ageing Populations: Overlapping Generations Model Simulations for Seven OECD Countries," OECD Economics Department Working Papers 201, OECD Publishing.
    4. Ignazio Visco, 2000. "Welfare systems, ageing and work: an OECD perspective," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 53(212), pages 3-29.
    5. Robert P. Hagemann & Giuseppe Nicoletti, 1989. "Ageing Populations: Economic Effects and Implications for Public Finance," OECD Economics Department Working Papers 61, OECD Publishing.
    6. Ignazio Visco, 2000. "Welfare systems, ageing and work: an OECD perspective," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 53(212), pages 3-29.
    7. Deborah Roseveare & Willi Leibfritz & Douglas Fore & Eckhard Wurzel, 1996. "Ageing Populations, Pension Systems and Government Budgets: Simulations for 20 OECD Countries," OECD Economics Department Working Papers 168, OECD Publishing.
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    Citations

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    Cited by:

    1. P. R. Lane, 2001. "The National Pensions Reserve Fund: Pitfalls and Opportunities," Trinity Economics Papers 20017, Trinity College Dublin, Department of Economics.

    More about this item

    Keywords

    Ageing; Demographics; Economic Growth; Expenditure; Growth; Pension; Population; Productivity;

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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