Options for reforming unfunded public pension schemes that are now being discussed all share the feature that the burden induced by demographic change would be shifted towards presently living and away from unborn generations. Existing models of the political economy of pension reform can not...

In this paper I use a multi-period OLG model to study how a demographic shock is distributed among different generations. In particular, I investigate whether a funded pension system allows for a smoother adjustment than an unfunded system. The results suggest that the answer to this question...

In this paper we consider the effects of population aging on a pay-as-you-go financed defined contributions pension scheme. We show that when retirement decisions are endogenous, aging increases the retirement age and the steady state level of capital. The effect on pension payouts is in general...

This paper studies the effect of demographic change on national saving, global interest rates, and international capital flows, focusing on the role of the public pension system. We develop a small open economy overlapping generations model to illustrate the channels through which demographic...

This paper analyzes and compares the macroeconomic performance of defined-benefit and defined-contribution pay-as-you-go pension systems when population ages. When the fertility rate decreases or longevity rises, it is shown that a shift from defined benefit (defined total benefit or defined...

The currently observed demographic change consists of two independent developments that differ in structure and persistence: (1) A slow, monotonic and (presumably) permanent ageing effect caused by an increasing life expectancy; (2) a more rapidly changing, non-monotonic and less permanent...