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Demographic Change Across the Globe

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  • Marga Peeters
  • Loek Groot

Abstract

This paper investigates the fiscal pressure, or the level of public expenditure on old and young economically inactive people, arising from demographic change in relation to the labour market space, or the proportion of the working age population not in full-time employment. The exercise is carried out for 50 countries that cover 75% of the world population. The pressure-to-space indicator ranks Poland, Turkey and Greece high, although, apart from Turkey and India, developing countries generally rank low due to low spending on the old (pensions, healthcare) and on the young (education, family costs). Peculiarly, economies with higher pressure have more space. The hypothesis that ageing economies have started using their labour market space in anticipation of higher demographic pressure is rejected. It is important to note that raising the retirement age in developed economies by five years alleviates fiscal pressure by almost 30% and creates 10% more labour market space.

Suggested Citation

  • Marga Peeters & Loek Groot, 2012. "Demographic Change Across the Globe," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 13(2), pages 75-98, April.
  • Handle: RePEc:wej:wldecn:519
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    Cited by:

    1. Marga Peeters & Loek Groot, 2012. "Demographic Pressure in the European Union," EERI Research Paper Series EERI_RP_2012_11, Economics and Econometrics Research Institute (EERI), Brussels.
    2. Marga Peeters, 2012. "Better Safe than Sorry - Individual Risk-free Pension Schemes in the European Union," Contemporary Economics, University of Finance and Management in Warsaw, vol. 6(3), September.

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