Uncertainty in demographic developments lowers expected future welfare levels. Increasing current tax rates and decreasing expected future tax rates may compensate part of the welfare loss that is due to demographic uncertainty. In doing so, the government effectively pursues a precautionary...

The ageing of the Dutch population, resulting in an increase in the number of retirees relative to the working population, has induced a debate about the sustainability of the Dutch first pillar pension scheme (AOW). The system is financed as a pay-as-you-go system. This paper explores possible...

This paper presents stochastic simulations, i.e. simulations that combine the CGE model of the Dutch economy GAMMA with stochastic population projections, to quantify uncertainties surrounding the consequences of population ageing for Dutch public finances. The expected increase in the ratio of...

The ageing of the population jeopardises the sustainability of public finances in the Netherlands. The doubling of the ratio between the number of retirees and the number of workers destroys the balance between future public expenditure and tax revenues. Read also the accompanying <a href="http://www.cpb.nl/node/13346">press...</a>