Due to the accelerating demographic change of the population the reform of the existing pension systems constitutes one of the greatest political challenges in most European countries. A theoretical discussion of different pension reforms must incorporate not only the demographic aspect but also...

For decades, pension systems were based on the rising revenue generated by an expanding population (demographic dividend). As changes in fertility and longevity created new population structures, however, the dividend disappeared, but pension systems failed to adapt. They are kept solvent by...