IDEAS home Printed from https://ideas.repec.org/p/cnn/wpaper/25-018e.html
   My bibliography  Save this paper

Aging, Population Projections, and Public Pensions

Author

Listed:
  • Selahattin Imrohoroglu

Abstract

This paper investigates the long-term implications of demographic aging for public pension sustainability, using population projections from both international and national sources. Drawing on the 2024–2100 United Nations World Population Prospects (UN WPP) as well as forecasts from the Social Security Administration (SSA), U.S. Census Bureau (CB), Congressional Budget Office (CBO), and Japans National Institute of Population and Social Security Research (IPSS), I document substantial cross-country variation in projected old-age dependency ratios. In addition, there is a large range of forecasts produced by different assumptions on fertility and immigration. I calculate a key forward-looking metric—the number of full retirement age (FRA) postponements required to maintain the 2023 dependency ratio through 2100. I show that advanced economies like Japan, having aged much earlier, face more modest required adjustments, while many middle-income countries will need much sharper policy shifts. I further demonstrate the sensitivity of unfunded pension liabilities to alternative demographic projections in the U.S. and Japan, and quantify the impact of Japans 2004 macroeconomic slide reform on long-run fiscal sustainability. The results underscore the importance of proactive pension reform—particularly in developing economies entering demographic transition with limited time and institutional and fiscal capacity.

Suggested Citation

  • Selahattin Imrohoroglu, 2025. "Aging, Population Projections, and Public Pensions," CIGS Working Paper Series 25-018E, The Canon Institute for Global Studies.
    • Handle: RePEc:cnn:wpaper:25-018e
    as

    Download full text from publisher

    File URL: https://cigs.canon/en/uploads/2025/07/WP25-018E_250717_selahattin02.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fernández-Villaverde, Jesús & Ventura, Gustavo & Yao, Wen, 2025. "The wealth of working nations," European Economic Review, Elsevier, vol. 173(C).
    2. Doi, Takero & Hoshi, Takeo & Okimoto, Tatsuyoshi, 2011. "Japanese government debt and sustainability of fiscal policy," Journal of the Japanese and International Economies, Elsevier, vol. 25(4), pages 414-433.
    3. Gary Hansen & Selahattin Imrohoroglu, 2016. "Fiscal Reform and Government Debt in Japan: A Neoclassical Perspective," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 21, pages 201-224, July.
    4. Braun, R. Anton & Joines, Douglas H., 2015. "The implications of a graying Japan for government policy," Journal of Economic Dynamics and Control, Elsevier, vol. 57(C), pages 1-23.
    5. Gary Hansen & Selahattin Imrohoroglu, 2023. "Demographic Change, Government Debt and Fiscal Sustainability in Japan: The Impact of Bond Purchase by the Bank of Japan," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 50, pages 88-105, October.
    6. Kitao, Sagiri, 2015. "Fiscal cost of demographic transition in Japan," Journal of Economic Dynamics and Control, Elsevier, vol. 54(C), pages 37-58.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Selahattin İmrohoroğlu & Akio Ino, 2025. "Fiscal sustainability and market incompleteness: quantitative findings for Japan," The Japanese Economic Review, Springer, vol. 76(2), pages 463-491, April.
    2. Sagiri Kitao, 2017. "When do we Start? Pension reform in ageing Japan," The Japanese Economic Review, Japanese Economic Association, vol. 68(1), pages 26-47, March.
    3. Selahattin İmrohoroğlu & Sagiri Kitao & Tomoaki Yamada, 2017. "Can Guest Workers Solve Japan'S Fiscal Problems?," Economic Inquiry, Western Economic Association International, vol. 55(3), pages 1287-1307, July.
    4. Nakajima, Tomoyuki & Takahashi, Shuhei, 2017. "The optimum quantity of debt for Japan," Journal of the Japanese and International Economies, Elsevier, vol. 46(C), pages 17-26.
    5. Gary Hansen & Selahattin Imrohoroglu, 2023. "Demographic Change, Government Debt and Fiscal Sustainability in Japan: The Impact of Bond Purchase by the Bank of Japan," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 50, pages 88-105, October.
    6. Akira Okamoto, 2025. "The optimum quantity of debt for an aging Japan: welfare and demographic dynamics," The Japanese Economic Review, Springer, vol. 76(1), pages 1-52, January.
    7. Ono, Taiki, 2024. "Bequests and wealth inequality in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 72(C).
    8. Selahattin İmrohoroğlu & Sagiri Kitao & Tomoaki Yamada, 2016. "Achieving Fiscal Balance In Japan," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57(1), pages 117-154, February.
    9. Sagiri KITAO & Minamo MIKOSHIBA, 2022. "Why Women Work the Way They Do in Japan: Roles of Fiscal Policies," Discussion papers 22016, Research Institute of Economy, Trade and Industry (RIETI).
    10. Kudrna, George & Tran, Chung & Woodland, Alan, 2019. "Facing Demographic Challenges: Pension Cuts Or Tax Hikes?," Macroeconomic Dynamics, Cambridge University Press, vol. 23(2), pages 625-673, March.
    11. Kitao, Sagiri, 2015. "Pension reform and individual retirement accounts in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 38(C), pages 111-126.
    12. Nakakuni, Kanato, 2024. "Macroeconomic analysis of the child benefit: Fertility, demographic structure, and welfare," Journal of the Japanese and International Economies, Elsevier, vol. 73(C).
    13. Gary Hansen & Selahattin Imrohoroglu, 2016. "Fiscal Reform and Government Debt in Japan: A Neoclassical Perspective," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 21, pages 201-224, July.
    14. İmrohoroğlu, Selahattin & Kitao, Sagiri & Yamada, Tomoaki, 2019. "Fiscal sustainability in Japan: What to tackle?," The Journal of the Economics of Ageing, Elsevier, vol. 14(C).
    15. Kitao, Sagiri & Mikoshiba, Minamo, 2020. "Females, the elderly, and also males: Demographic aging and macroeconomy in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 56(C).
    16. Sagiri Kitao, 2018. "Policy Uncertainty and Cost of Delaying Reform: The Case of Aging Japan," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 27, pages 81-100, January.
    17. Kato, Ryuta Ray, 2018. "The future prospect of the long-term care insurance in Japan," Japan and the World Economy, Elsevier, vol. 47(C), pages 1-17.
    18. SAKURAGAWA, Masaya & SAKURAGAWA, Yukie, 2025. "Low Interest Rates, Growth, and Sustainable Fiscal Policies," Discussion paper series HIAS-E-152, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    19. Hagiwara, Reona, 2020. "Seigniorage and Japanese fiscal sustainability: Simulation analysis using an overlapping generations model," Economic Modelling, Elsevier, vol. 84(C), pages 340-356.
    20. Hirokuni Iiboshi & Daisuke Ozaki, 2022. "The Impact of the Social Security Reforms on Welfare: Who benefits and Who loses across Generations, Gender, and Employment Type?," Papers 2205.08042, arXiv.org, revised Oct 2022.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cnn:wpaper:25-018e. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: The Canon Institute for Global Studies (email available below). General contact details of provider: https://edirc.repec.org/data/canonjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.