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Demographic Change, Social Security Systems, and Savings

Author

Listed:
  • David Bloom

    (Harvard School of Public Health)

  • David Canning

    (Harvard School of Public Health)

  • Rick Mansfield

    (Yale University)

  • Michael Moore

    (Queen's University Belfast)

Abstract

In theory, improvements in health life expectancy should generate increases in the average age of retirement, with little effect on savings rates. In many countries, however, retirement incentives in social security programs prevent retirement age from keeping pace with changes in life expectancy, leading to an increased need for life-cycle savings. Analyzing a cross-country panel of macroeconomic data, we find that increased longevity raises aggregate savings rates in countries with universal pension coverage and retirement incentives, though the effect disappears in countries with pay-as-you-go systems and high replacement rates.

Suggested Citation

  • David Bloom & David Canning & Rick Mansfield & Michael Moore, 2006. "Demographic Change, Social Security Systems, and Savings," PGDA Working Papers 1906, Program on the Global Demography of Aging.
    • Handle: RePEc:gdm:wpaper:1906
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    File URL: http://www.hsph.harvard.edu/pgda/WorkingPapers/2006/PGDA_WP_19.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Savings; demographic change; population economics; social security systems;
    All these keywords.

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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