Analysis and Forecasting of Social Security: A Study of Robustness.

In this paper, we analyze the robustness of an economic-demographic projection model emphasizing the macroeconomic impact of age-structured savings and consumption behavior. The parameters varied are saving and labor force participation rates (two of the key sources of uncertainty in the social security policy debate) and the parameters of the production function (the key source of uncertainty in any long-run economic analysis). The sensitivity analysis focuses on three variables: assets of the private pension system, the income of the non-working elderly, and the balance of the Pay As You Go Pension system.