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Ageing and the sustainability of Dutch public finances

Author

Listed:
  • Casper van Ewijk

    (CPB Netherlands Bureau for Economic Policy Analysis)

  • Nick Draper

    (CPB Netherlands Bureau for Economic Policy Analysis)

  • Harry ter Rele

    () (CPB Netherlands Bureau for Economic Policy Analysis)

  • Ed Westerhout

    () (CPB Netherlands Bureau for Economic Policy Analysis)

Abstract

The ageing of the population jeopardises the sustainability of public finances in the Netherlands. The doubling of the ratio between the number of retirees and the number of workers destroys the balance between future public expenditure and tax revenues. Read also the accompanying press release . Indeed, the increase in expenditure on public pensions and health and long-term care will outweigh the increase in tax revenues. Budgetary reforms are therefore necessary in order to avoid that future generations will have to raise taxes or economize on public expenditure. Reforms in the field of social security of the last few years are a step in the right direction, but are insufficient. In particular, the decline of interest rates and the reduced wealth of pension funds have worsened the sustainability of public finances. The effects of reforms on the intergenerational balance are important for the question which further reforms are most attractive.

Suggested Citation

  • Casper van Ewijk & Nick Draper & Harry ter Rele & Ed Westerhout, 2006. "Ageing and the sustainability of Dutch public finances," CPB Special Publication 61, CPB Netherlands Bureau for Economic Policy Analysis.
  • Handle: RePEc:cpb:spcial:61
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    File URL: http://www.cpb.nl/sites/default/files/publicaties/download/ageing-and-sustainability-dutch-public-finances.pdf
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    References listed on IDEAS

    as
    1. Ed Westerhout & Frank Pellikaan, 2005. "Can we afford to live longer in better health?," CPB Document 85, CPB Netherlands Bureau for Economic Policy Analysis.
    2. W. M. T. Westerhout, 2006. "Does Ageing Call for a Reform of the Health Care Sector?," CESifo Economic Studies, CESifo, vol. 52(1), pages 1-31, March.
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    Citations

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    Cited by:

    1. Rob Euwals & Marike Knoef & Daniel Vuuren, 2011. "The trend in female labour force participation: what can be expected for the future?," Empirical Economics, Springer, vol. 40(3), pages 729-753, May.
    2. Alessandro Bucciol & Roel M.W.J. Beetsma, 2010. "Inter- and Intra-generational Consequences of Pension Buffer Policy under Demographic, Financial, and Economic Shocks," CESifo Economic Studies, CESifo, vol. 56(3), pages 366-403, September.
    3. Peter Wierts, 2007. "The sustainability of euro area debt: a re-assessment," DNB Working Papers 134, Netherlands Central Bank, Research Department.
    4. Jan-Maarten van Sonsbeek & j.m.van.sonsbeek@vu.nl, 2011. "Micro simulations on the effects of ageing-related policy measures: The Social Affairs Department of the Netherlands Ageing and Pensions Model," International Journal of Microsimulation, International Microsimulation Association, vol. 4(1), pages 72-99.
    5. Roel Beetsma & Alessandro Bucciol, 2011. "Differentiating Indexation in Dutch Pension Funds," De Economist, Springer, vol. 159(3), pages 323-360, September.
    6. W. Melyn & L. Van Meensel & S. Van Parys, 2016. "The sustainability of public finances in the context of population ageing," Economic Review, National Bank of Belgium, issue iii, pages 87-103, December.
    7. Frits Bos, 2007. "The Dutch fiscal framework; history, current practice and the role of the CPB," CPB Document 150, CPB Netherlands Bureau for Economic Policy Analysis.
    8. Daniël van Vuuren, 2011. "Flexible Retirement," CPB Discussion Paper 174, CPB Netherlands Bureau for Economic Policy Analysis.
    9. Alex Armstrong & Nick Draper & Ed Westerhout, 2008. "The impact of demographic uncertainty on public finances in the Netherlands," CPB Discussion Paper 104, CPB Netherlands Bureau for Economic Policy Analysis.
    10. Edwin van de Haar, 2015. "CPB Netherlands Bureau for Economic Policy Analysis: Dutch (economic) policy-making," Contemporary Social Science, Taylor & Francis Journals, vol. 10(2), pages 182-190, June.
    11. Nick Draper & Alex Armstrong, 2007. "GAMMA; a simulation model for ageing, pensions and public finances," CPB Document 147, CPB Netherlands Bureau for Economic Policy Analysis.
    12. Knoef, M.G., 2011. "Essays on labor force participation, aging, income and health," Other publications TiSEM 2ac55c2f-b678-457d-b936-7, Tilburg University, School of Economics and Management.
    13. Westerhout, Ed, 2018. "Paying for the Ageing Crisis : Who, How and When?," Discussion Paper 2018-001, Tilburg University, Center for Economic Research.
    14. Daniel Vuuren, 2014. "Flexible Retirement," Journal of Economic Surveys, Wiley Blackwell, vol. 28(3), pages 573-593, July.
    15. Claudia Münch & Sweder van Wijnbergen, 2009. "Education and Labor Market Activity of Women: An Age-Group Specific Empirical Analysis," Tinbergen Institute Discussion Papers 09-099/2, Tinbergen Institute.
    16. van Sonsbeek, Jan-Maarten, 2010. "Micro simulations on the effects of ageing-related policy measures," Economic Modelling, Elsevier, vol. 27(5), pages 968-979, September.
    17. Koen Caminada & Kees Goudswaard, 2008. "Revenue Effects of Tax Facilities for Pension Savings," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 36(2), pages 233-246, June.
    18. Daniel S Kanda, 2011. "Modeling Optimal Fiscal Consolidation Paths in a Selection of European Countries," IMF Working Papers 11/164, International Monetary Fund.
    19. Alex Armstrong & Nick Draper & André Nibbelink & Ed Westerhout, 2007. "Fiscal prefunding in response to demographic uncertainty," CPB Discussion Paper 85, CPB Netherlands Bureau for Economic Policy Analysis.
    20. Abderrahim Chibi & Sidi Mohamed Chekouri & Mohamed Benbouziane, 2015. "Assessing Fiscal Sustainability in Algeria: a Nonlinear Approach," Working Papers 962, Economic Research Forum, revised Oct 2015.

    More about this item

    JEL classification:

    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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