When the challenges of population aging are being debated, the uncertain future of pension systems is a topic of high priority and large controversy. The aim of this chapter is not to provide a “consensus view” on social security and public insurance in aging populations but to put structure...

This chapter reviews the literature on intergenerational risk sharing (IRS). We explore to what extent and how a market economy with an appropriate institutional setting can replicate a social planner's solution in models with increasing levels of complexity. In particular, we do this for...

We review the evidence on decision making in complex choice situations—i.e., situations where there are many alternatives and/or where attributes of alternatives are difficult to understand. We focus on choices about health insurance, health care, and retirement planning, all of which are very...

Inevitable population aging and slower population growth will affect the economies of all nations in ways influenced by cultural values, institutional arrangements, and economic incentives. One outcome will be a tendency toward increased capital intensity, higher wages, and lower returns on...

This chapter provides a review of some implications of demographic shift arising from population aging for fiscal policy, taxation policy, and social security settings. The key implications of population aging that have been forthcoming from the many national and international macroeconomic...

Pensions and population aging intersect in two ways. First, demographic change threatens the sustainability of traditional pay-as-you-go social security pensions, leaving workplace-linked pensions with a greater role in retirement provision. Second, as the Baby Boom generation enters retirement,...

The early contributions to the microeconomic literature assume that only market goods yield utility, and that the only way adults can secure the consumption of these goods in old age is by saving. The more recent contributions recognize, however, that the elderly derive utility also from goods...