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Rational Pension Policies

Author

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  • Axel Börsch-Supan

    (Munich Center for the Economics of Aging (MEA) at the Max-Planck-Institute for Social Law and Social Policy; Technical University of Munich (TUM); and National Bureau of Economic Research (NBER))

Abstract

Summary Aim of this keynote is to develop a framework how to approach the design of pension policies as rationally as possible. The first step is to realize and accommodate endogenous adjustments. The second step is to align the root causes of demographic change with corresponding reform steps which include but are not confined by pension reform. The third step is to separate the issues as best as possible to strengthen the political feasibility of reform. The paper shows that relatively few and moderate reform steps suffice to solve the demographic problem in countries such as Germany and Switzerland. This is in striking contrast to the widespread resistance to reform. We falsify some of the myths, prejudices and misperceptions which make reforms politically so hard to put into place.

Suggested Citation

  • Axel Börsch-Supan, 2016. "Rational Pension Policies," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 152(2), pages 103-124, April.
    • Handle: RePEc:spr:sjecst:v:152:y:2016:i:2:d:10.1007_bf03399424
    DOI: 10.1007/BF03399424
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    References listed on IDEAS

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    1. Vicki Freedman & Brenda Spillman & Patti Andreski & Jennifer Cornman & Eileen Crimmins & Ellen Kramarow & James Lubitz & Linda Martin & Sharon Merkin & Robert Schoeni & Teresa Seeman & Timothy Waidman, 2013. "Trends in Late-Life Activity Limitations in the United States: An Update From Five National Surveys," Demography, Springer;Population Association of America (PAA), vol. 50(2), pages 661-671, April.
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    3. Hans Fehr & Sabine Jokisch & Larry Kotlikoff, 2003. "The Developed World's Demographic Transition - the Roles of Capital Flows, Immigration, and Policy," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-133, Boston University - Department of Economics.
    4. Börsch-Supan, Axel & Tito Boeri & Guido Tabellini, 2002. "Would you Like to Reform the Pension System?," MEA discussion paper series 02007, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    5. Mazzonna, Fabrizio & Peracchi, Franco, 2012. "Ageing, cognitive abilities and retirement," European Economic Review, Elsevier, vol. 56(4), pages 691-710.
    6. Börsch-Supan, Axel & Weiss, Matthias, 2016. "Productivity and age: Evidence from work teams at the assembly line," The Journal of the Economics of Ageing, Elsevier, vol. 7(C), pages 30-42.
    7. Jonathan Gruber & David A. Wise, 2004. "Social Security Programs and Retirement around the World: Micro-Estimation," NBER Books, National Bureau of Economic Research, Inc, number grub04-1, February.
    8. Vicki Freedman & Eileen Crimmins & Robert Schoeni & Brenda Spillman & Hakan Aykan & Ellen Kramarow & Kenneth Land & James Lubitz & Kenneth Manton & Linda Martin & Diane Shinberg & Timothy Waidmann, 2004. "Resolving inconsistencies in trends in old-age disability: Report from a technical working group," Demography, Springer;Population Association of America (PAA), vol. 41(3), pages 417-441, August.
    9. Boeri, Tito & Börsch-Supan, Axel & Tabellini, Guido, 2002. "Would you Like to Reform the Pension System? The Opinions of European Citizens," Sonderforschungsbereich 504 Publications 02-22, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
    10. Stefanie Behncke, 2012. "Does retirement trigger ill health?," Health Economics, John Wiley & Sons, Ltd., vol. 21(3), pages 282-300, March.
    11. Attanasio, Orazio & Kitao, Sagiri & Violante, Giovanni L., 2007. "Global demographic trends and social security reform," Journal of Monetary Economics, Elsevier, vol. 54(1), pages 144-198, January.
    12. repec:mea:meawpa:13269 is not listed on IDEAS
    13. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-491, June.
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