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Population ageing and labor market frictions. An OLG model applied to Lebanon

Author

Listed:
  • Marie Claude Kamar

    (Université Saint Joseph)

  • Riccardo Magnani

    (Université Sorbonne Paris Nord and CEPN)

Abstract

We evaluate the effects of population ageing on the macroeconomic evolution of the Lebanese economy and on the financial sustainability of its major pension schemes. We use an OLG model with labor market frictions in the as in de la Croix et al. (2013). Individuals are differentiated by age, gender, and education and choose the sector of activity, which implies that the size of the informal sector is endogenous. We assess the long-run implications of population ageing and show that the public sector pension scheme is unsustainable while the private sector scheme is insufficient to ensure decent living standards for the elderly. Finally, we evaluate the effects of two pension reforms; in the first one we propose a mix of measures aiming at guaranteeing the sustainability of the public sector scheme; in the second one we propose some measures aiming at increasing the size of the private sector scheme.

Suggested Citation

  • Marie Claude Kamar & Riccardo Magnani, 2022. "Population ageing and labor market frictions. An OLG model applied to Lebanon," Working Papers 3, SITES.
    • Handle: RePEc:awm:wpaper:3
    Note: SITES Working Papers 3
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    References listed on IDEAS

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    2. de la Croix, David & Pierrard, Olivier & Sneessens, Henri R., 2013. "Aging and pensions in general equilibrium: Labor market imperfections matter," Journal of Economic Dynamics and Control, Elsevier, vol. 37(1), pages 104-124.
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    More about this item

    Keywords

    Pensions; Population ageing; OLG models; Labor market frictions;
    All these keywords.

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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