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Aging and the Financing of Social Security in Switzerland

  • Christian Keuschnigg
  • Mirela Keuschnigg
  • Christian Jaag

The gains in life expectancy are expected to double the dependency ratio and increase population by 10% in Switzerland until 2050. To quantify the effects on social security and public finances, we use an overlapping generations model with five margins of labor supply: labor market participation, hours worked, job search, retirement, and on-the-job training. A passive fiscal strategy would be very costly. A comprehensive reform, including an increase in the retirement age to 68 years, may limit the tax increases to 4 percentage points of value added tax and reduce the decline of per capita income to less than 6%.

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Article provided by Swiss Society of Economics and Statistics (SSES) in its journal Swiss Journal of Economics and Statistics.

Volume (Year): 147 (2011)
Issue (Month): II (June)
Pages: 181-231

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Handle: RePEc:ses:arsjes:2011-ii-3
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