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Pensions and the Nordic Welfare Model

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  • Torben M. Andersen

Abstract

Within the frame of the Nordic welfare model, pension system design has taken very different routes. While the overall aims in terms of distribution and replacement rates are similar, the division of labour between defined benefit and contribution as well as pay-as-you-go versus funded schemes differs significantly. The main characteristics of the pension systems in the Nordic countries are presented, and outcomes relating to pension adequacy in terms of poverty and replacement rates are discussed. Specific design issues related to achieving distributional goals and financial robustness via automatic adjustment mechanisms are highlighted. Finally, the overall financial sustainability of pension systems and the macroeconomic implications are discussed.

Suggested Citation

  • Torben M. Andersen, 2023. "Pensions and the Nordic Welfare Model," CESifo Working Paper Series 10321, CESifo.
    • Handle: RePEc:ces:ceswps:_10321
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    More about this item

    Keywords

    pension systems; pension adequacy; fiscal sustainability; distribution; insurance; incentives;
    All these keywords.

    JEL classification:

    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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