Stabilizing pay-as-you-go pension schemes in the face of rising longevity and falling fertility: an application to the Netherlands
Rising longevity and falling fertility threaten the sustainability of pay-as-you-go pension schemes. This paper shows that maintaining the intergenerational balance in the Dutch pay-as-you-go pension scheme in the face of increased longevity since the introduction of the scheme in 1957 would have required a gradual increase of the retirement age to at least 68 years for the generation born in 1945. Furthermore, we show that projected increases in labour-force participation rates do not generate sufficient additional tax revenues to subsitute for the dearth of human capital caused by falling fertility rates.
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- Gopi Shah Goda & John Shoven, 2008.
"Adjusting Government Policies for Age Inflation,"
08-062, Stanford Institute for Economic Policy Research.
- Giovanni Mastrobuoni, 2006. "Labor Supply Effects of the Recent Social Security Benefit Cuts: Empirical Estimates Using Cohort Discontinuities," CeRP Working Papers 53, Center for Research on Pensions and Welfare Policies, Turin (Italy).
- David Cutler & Ellen Meara, 2001. "Changes in the Age Distribution of Mortality Over the 20th Century," NBER Working Papers 8556, National Bureau of Economic Research, Inc.
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