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Demographic Change, Social Security Systems, and Savings

Author

Listed:
  • David E. Bloom
  • David Canning
  • Rick Mansfield
  • Michael Moore

Abstract

In theory, improvements in healthy life expectancy should generate increases in the average age of retirement, with little effect on savings rates. In many countries, however, retirement incentives in social security programs prevent retirement ages from keeping pace with changes in life expectancy, leading to an increased need for life-cycle savings. Analyzing a cross-country panel of macroeconomic data, we find that increased longevity raises aggregate savings rates in countries with universal pension coverage and retirement incentives, though the effect disappears in countries with pay-as-you-go systems and high replacement rates.

Suggested Citation

  • David E. Bloom & David Canning & Rick Mansfield & Michael Moore, 2006. "Demographic Change, Social Security Systems, and Savings," NBER Working Papers 12621, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:12621
    Note: AG EFG LS PE
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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