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Pension Systems, Ageing and the Stability and Growth Pact

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  • Roel Beetsma
  • Heikki Oksanen

Abstract

This paper explores how the Stability and Growth Pact may cope with the future costs of population ageing in the European Union. Clearly, population ageing has forced countries to reform their pension systems, and will continue to do so, both by reducing the generosity of pension arrangements and by switching to funding rather than relying on pure pay-as-you go pension provision. We study how such reforms affect the room for adhering to the Pact, but also how the Pact may induce or hamper the incentives for reform. In our analysis we will draw on recent literature on the Pact and on the pensions and the ageing problem. We will also calibrate a simple model for addressing intergenerational equity. Keywords: Public pensions, population ageing, government budget deficit and debt, European Union Stability and Growth Pact.

Suggested Citation

  • Roel Beetsma & Heikki Oksanen, 2007. "Pension Systems, Ageing and the Stability and Growth Pact," European Economy - Economic Papers 2008 - 2015 289, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    • Handle: RePEc:euf:ecopap:0289
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    Cited by:

    1. Christine Mayrhuber & Gerhard Rünstler & Thomas Url & Werner Eichhorst & Michael J. Kendzia & Maarten Gerard & Connie Nielsen, 2011. "Pension Systems in the EU. Contingent Liabilities and Assets in the Public and Private Sector," WIFO Studies, WIFO, number 43938.
    2. Costantini, Valeria & Sforna, Giorgia, 2020. "A dynamic CGE model for jointly accounting ageing population, automation and environmental tax reform. European Union as a case study," Economic Modelling, Elsevier, vol. 87(C), pages 280-306.
    3. Daniel Nicolae Militaru, 2011. "The Impact Of The Economic And Financial Crisis On Pension Systems In The European Union," Revista Tinerilor Economisti (The Young Economists Journal), University of Craiova, Faculty of Economics and Business Administration, vol. 1(17), pages 20-23, November.
    4. Manfred Weber & Karl Knappe, 2007. "Fiscal policy in EMU after the reform of the european stability and growth pact," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 8(4), pages 45-51, January.
    5. Florin Marian BUHOCIU & Raducan OPREA & Valentin Marian ANTOHI, 2010. "Analysis of Main Social Indicators Developments Regarding Labour Market in 2007-2009 in Romania," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 1, pages 109-116.
    6. Boena CHOVANCOVÁ & Jaroslav HUDCOVSKÝ, 2016. "Return-risk profile of Slovak pension funds," REVISTA ADMINISTRATIE SI MANAGEMENT PUBLIC, Faculty of Administration and Public Management, Academy of Economic Studies, Bucharest, Romania, vol. 2016(27), pages 94-106, Decembre.
    7. Pena Miguel Noemi & De la Peña Esteban J. Inaki & Fernandez-Sainz Ana, 2017. "Financial Model for Universal Minimum Benefit for Spain," Basic Income Studies, De Gruyter, vol. 12(1), pages 1-16, June.
    8. Andras Simonovits, 2012. "Pension Reforms in an Aging Society: A Fully Displayed Cohort Model," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 4, pages 1-30, December.
    9. Peña Miguel, Noemí & De la Peña Esteban, Joseba Iñaki, 2017. "A first approach to a pay-as-you-go model for a social benefit in Spain," Cuadernos de Gestión, Universidad del País Vasco - Instituto de Economía Aplicada a la Empresa (IEAE).
    10. Heikki Oksanen, 2009. "Setting targets for government budgets in the pursuit of intergenerational equity," European Economy - Economic Papers 2008 - 2015 358, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    11. Manfred Weber & Karl Knappe, 2007. "Fiscal policy in EMU after the reform of the european stability and growth pact," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 8(04), pages 45-51, January.
    12. Simonovits, András, 2009. "Népességöregedés, tb-nyugdíj és megtakarítás - parametrikus nyugdíjreformok [Population aging, the public pension system, and savings: parametric pension reforms]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(4), pages 297-321.
    13. Daniel Nicolae Militaru, 2011. "The Costs of Demographic and Economic Crises - Challenges to Pension Systems Reform," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 11(4), pages 175-182.
    14. László, Csaba, 2018. "A magánnyugdíjpénztári rendszer "elszámolása" ["Reckoning up" the private pension system]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 861-902.

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    More about this item

    Keywords

    Public pensions; population ageing; government budget deficit and debt; European Union Stability and Growth Pact; Beetsma; Oksanen;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H6 - Public Economics - - National Budget, Deficit, and Debt

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