Welfare effects of alternative pension reforms: Assessing the transition costs for French socio-occupational groups

2005 ◽  
Vol 4 (3) ◽  
pp. 249-271 ◽  
Author(s):  
P. Y. HENIN ◽  
Th. WEITZENBLUM
Keyword(s):  
Life Expectancy ◽  
Low Income ◽  
Considerable Increase ◽  
Pension System ◽  
Retirement Age ◽  
Cycle Model ◽  
Occupational Groups ◽  
Pension Reforms ◽  
Transition Costs ◽  
Legal Retirement Age

In this paper, we assess the welfare costs and gains of different scenarios of pension reforms in France, using a life-cycle model including various sources of heterogeneity and distinguishing between socio-occupational groups. The pension reforms considered combine features regarding the generosity of the pension system as well as features regarding the financing schemes: PAYG, the build-up of a temporary fund and that of a permanent one. We focus on both macro and distributional issues. It appears that (i) a considerable increase in savings is to be expected, even in the case where pensions remain generous, (ii) a considerable crowding-out effect would occur in the case of the constitution of a fund trust, (iii) reducing the generosity of pension seems relatively more beneficial to low-income low-life expectancy agents, while (iv) postponing the legal retirement age benefits relatively more high-income high-life expectancy agents.

Adjustment of Legal Retirement Age in Chinese Mainland

2011 ◽  
Vol 422 ◽  
pp. 684-687
Author(s):  
Shi Bin Song ◽  
Qi Song ◽  
Xiao Jun Xue ◽  
Yun Wan
Keyword(s):  
Labor Market ◽  
Life Expectancy ◽  
Population Aging ◽  
Supply And Demand ◽  
Chinese Mainland ◽  
Retirement Age ◽  
Demographic Dividend ◽  
Factors Affecting ◽  
Per Capita ◽  
Legal Retirement Age

With the coming rush of population aging and the termination of the demographic dividend, the question on the extension of the legal retirement age is becoming a hot topic in the community. This paper analyzes factors affecting retirement age，such　as demographic dividend, life expectancy, years of education per capita, supply and demand situation in labor market. From these factors, reasonable quantitative reference standards can be introduced.

scholarly journals ANALYSIS OF THE RELATIONSHIP BETWEEN WORKING TIME AND RETIREMENT TIME IN THE NUTS 2 REGIONS OF HUNGARY IN THE LIGHT OF GENDER AND REGIONAL DISPARITIES

2020 ◽  
Vol 8 (12) ◽  
pp. 309-320
Author(s):  
Felix A. Dorstelmann ◽  
Keyword(s):  
Life Expectancy ◽  
Pension System ◽  
Adult Life ◽  
Regional Disparities ◽  
Working Time ◽  
Retirement Age ◽  
Average Life Expectancy ◽  
Policy Measures ◽  
The Difference ◽  
And Gender

This paper examined the effects of raising the statutory retirement age at NUTS 2 levels, differentiated by gender in Hungary. The evaluation criterion was the ratio of working time to retirement time concerning adults average life expectancy. This criterion was used to examine whether and to what extent regional and gender disparities exist at NUTS 2 levels and whether these disparities should be considered in policy measures. The empirical results indicated differences between the genders and regions regarding the burden of raising the retirement age. Women spend more time in retirement than men in terms of average adult life expectancy. This finding illustrates the difference in life expectancy between the sexes in Hungary. Besides, regional disparities in participation in the pension system have been observed for both women and men. These disparities can cause unintended distributional effects when the retirement age is increased. In this context, it is recommended that further policy measures are taken to address gender and regional disparities.

scholarly journals NON-STATE PENSION INSURANCE AS A SUPPLEMENT TO SOLIDAR PENSION SUPPLY

2019 ◽  
pp. 102-109
Author(s):  
O. Boiko
Keyword(s):  
Life Expectancy ◽  
Pension Fund ◽  
Pension System ◽  
Insurance Companies ◽  
Retirement Age ◽  
Pension Insurance ◽  
Average Life Expectancy ◽  
The World ◽  
The Right ◽  
State Pension

The main prerequisites for the emergence of problems of the pension system functioning in Ukraine, namely the solidarity system, are considered in the article. The budget, expenditures and deficit of the Pension Fund of Ukraine in the period 2010-2018 are analyzed. The amount of pensions was calculated taking into account the change in the dollar exchange rate and the inflation rate for the analyzed period and it was proved that the increase in the size of the pension does not lead to its actual growth. Emphasis is placed on the principle of calculation of pensions and attention is paid to the concept of a single social contribution, which has the minimum and maximum possible sum of payment. Based on the data, the author compared the size of the minimum (state) pensions in different countries of the world and in Ukraine and showed that the size of the pension is the lowest among the compared countries. An important aspect of the study was the comparison of average life expectancy. This suggests that the increase in life expectancy is causing the states of the world to raise the retirement age in order to delay the payment of state pensions. Alongside this the alternative to state pensions are private pensions. During the working period, every citizen has the right to make savings in different financial institutions as they have the right to invest. Funds that have been saved and multiplied are the main source of retirement income. Voluntary pension institutions are also envisaged in Ukraine. However, despite the legislative support and the general need to have their own retirement savings, citizens do not actively take the opportunity to create additional pensions. The reasons for this are lack of awareness of the population by the state about the essence of the pension reform, the general economic situation in the country, as well as the lack of financial literacy of the population itself, the unwillingness to take responsibility for their future and the low level of income. On the basis of these data, the need for active involvement of both public administration and citizens in the cumulative system is substantiated. Keywords: retirement age, pension fund, cumulative insurance, life insurance companies.

scholarly journals Coping with Spain's aging: retirement rules and incentives

2009 ◽  
Vol 9 (4) ◽  
pp. 549-581 ◽  
Author(s):  
MARIO CATALÁN ◽  
JAIME GUAJARDO ◽  
ALEXANDER W. HOFFMAISTER
Keyword(s):  
Life Expectancy ◽  
Demographic Transition ◽  
Welfare Effects ◽  
Work Life ◽  
Substitution Effects ◽  
Retirement Age ◽  
Spanish Economy ◽  
Pension Reforms ◽  
Long Run ◽  
Pension Benefits

AbstractThis paper evaluates the macroeconomic and welfare effects of extending the averaging period used to calculate pension benefits in a pay-as-you-go system. It also examines the complementarities between reforms extending the averaging period and those increasing the retirement age under alternative tax policies. The analysis applies a model in the Auerbach-Kotlikoff tradition to the Spanish economy. Extending the averaging period to the entire work life maximizes long-run welfare and limits expenditure pressures at the peak of the demographic shock as much as increasing the retirement age in line with life expectancy. Moreover, during the demographic transition, pension reforms induce intertemporal labor substitution effects that engender aggregate labor cycles.

scholarly journals An Indexation Mechanism for Retirement Age: Analysis of the Gender Gap

Risks ◽  
2019 ◽  
Vol 7 (1) ◽  
pp. 21
Author(s):  
Mariarosaria Coppola ◽  
Maria Russolillo ◽  
Rosaria Simone
Keyword(s):  
Life Expectancy ◽  
Social Security ◽  
Gender Gap ◽  
Pension System ◽  
Residual Life ◽  
Retirement Age ◽  
Longevity Risk ◽  
Social Security Systems ◽  
Security Systems ◽  
Averaged Model

The management of National Social Security Systems is being challenged more and more by the rapid ageing of the population, especially in the industrialized countries. In order to chase the Pension System sustainability, several countries in Europe are setting up pension reforms linking the retirement age and/or benefits to life expectancy. In this context, the accurate modelling and projection of mortality rates and life expectancy play a central role and represent issues of great interest in recent literature. Our study refers to the Italian mortality experience and considers an indexing mechanism based on the expected residual life to adjust the retirement age and keep costs at an expected budgeted level, in the spirit of sharing the longevity risk between Social Security Systems and retirees. In order to combine fitting and projections performances of selected stochastic mortality models, a model assembling technique is applied to face uncertainty in model selection, while accounting for uncertainty of estimation as well. The resulting proposal is an averaged model that is suitable to discuss about the gender gap in longevity risk and its alleged narrowing over time.

scholarly journals On the Need for Prevention in the Pension System on the Example of the Demographic Reserve Fund

2010 ◽  
Vol 9 (1) ◽  
pp. 179-189 ◽  
Author(s):  
Piotr Obidziński
Keyword(s):  
Economic Growth ◽  
Social Security ◽  
Labor Force ◽  
Unemployment Rate ◽  
Pension System ◽  
Retirement Age ◽  
Occupational Groups ◽  
Earnings Growth ◽  
The Subject ◽  
Reserve Fund

On the Need for Prevention in the Pension System on the Example of the Demographic Reserve Fund The subject of this paper is the Demographic Reserve Fund (DRF) which was established following the November 11th 1998 legal act of on the system of social security. The goal of the paper is the analysis and diagnosis of as well as the forecast for the Fund's demand for the financial means that have emerged after ageing demographic boom generation started entering the retirement age. The forecast is based on the assumptions referring to the demographic, social and economic situation of the country. These assumptions particularly refer to fertility, mortality, economic growth, earnings growth, migration, inflation, unemployment rate, structure of the population with respect to occupational groups and groups being beyond the labor force, indicators of valorization of premiums paid and services from social security, etc.

scholarly journals Linking retirement age to life expectancy in a Bismarckian system – the case of Germany

2016 ◽  
Vol 237 ◽  
pp. R22-R29 ◽  
Author(s):  
Valentin Vogt ◽  
Jörg Althammer
Keyword(s):  
Life Expectancy ◽  
Simulation Model ◽  
Growth Model ◽  
Pension System ◽  
The Other ◽  
Leslie Matrix ◽  
Retirement Age ◽  
Detailed Calculation ◽  
Contribution Rate ◽  
Pension Insurance

In times of decreasing mortality, one way to stabilise a PAYG pension system is to interrelate the retirement age to the anticipated average lifespan. This paper investigates two approaches for Germany: one is to keep the average retirement duration constant, the other to define a constant share of the total lifespan for the retirement period. Our simulation model uses a Leslie matrix population projection, a Solow-Swan growth model and a detailed calculation of the German pension insurance budget. Our results show quite a significant impact on the insurance level and a rather small effect on the contribution rate, which is characteristic of a Bismarckian system.

scholarly journals Actuarial deductions for early retirement

2021 ◽  
pp. 1-27
Author(s):  
Markus Knell
Keyword(s):  
Early Retirement ◽  
Pension System ◽  
Budget Constraint ◽  
Retirement Age ◽  
Single Individual ◽  
Internal Rate Of Return ◽  
Market Interest Rate ◽  
Long Run ◽  
Retirement Behavior ◽  
The Right

Abstract This paper studies how the rates of deduction for early retirement have to be determined in pay-as-you-go (PAYG) systems in order to keep their budget stable. The derivation of these deductions requires the use of a multiperiod intertemporal budget constraint that involves assumptions about the retirement behavior of past, present, and future cohorts. In general, it is not possible to calculate budget-neutral deductions from the budget constraint of a single individual who retires before the target retirement age—an approach that dominates the related literature. Only for specific cases one can use this second approach but then one has to adjust the discount rate to the assumption about collective retirement. If there is only one deviating individual, then the right choice is the market interest rate while for a stationary retirement distribution it is the internal rate of return of the PAYG system. In this case, the necessary deductions are lower than under the standard approach. This is also true for retirement ages that fluctuate randomly around a stationary distribution. Various long-run developments (e.g., increases in life expectancy or permanent changes in the average retirement age) might cause challenges for the sustainability of the pension system. These developments, however, can only be dealt with by adequate adjustments to the basic pension formulas and not by the use of deduction rates.

scholarly journals Disaggregation of official demographic projections in sub-groups by education level: the neglected “composition effect” in the future path of life expectancy

Genus ◽  
2021 ◽  
Vol 77 (1) ◽  
Author(s):  
Sergio Ginebri ◽  
Carlo Lallo
Keyword(s):  
High Education ◽  
Life Expectancy ◽  
Education Level ◽  
Retirement Age ◽  
Composition Effect ◽  
Education Group ◽  
Population Forecasts ◽  
Low Education ◽  
Mortality Differential ◽  
Education Groups

AbstractWe developed an innovative method to break down official population forecasts by educational level. The mortality rates of the high education group and low education group were projected using an iterative procedure, whose starting point was the life tables by education level for Italy, based on the year 2012. We provide a set of different scenarios on the convergence/divergence of the mortality differential between the high and low education groups. In each scenario, the demographic size and the life expectancy of the two sub-groups were projected annually over the period 2018–2065. We compared the life expectancy paths in the whole population and in the sub-groups. We found that in all of our projections, population life expectancy converges to the life expectancy of the high education group. We call this feature of our outcomes the “composition effect”, and we show how highly persistent it is, even in scenarios where the mortality differential between social groups is assumed to decrease over time. In a midway scenario, where the mortality differential is assumed to follow an intermediate path between complete disappearance in year 2065 and stability at the 2012 level, and in all the scenarios with a milder convergence hypothesis, our “composition effect” prevails over the effect of convergence for men and women. For instance, assuming stability in the mortality differential, we estimated a life expectancy increase at age 65 of 2.9 and 2.6 years for men, and 3.2 and 3.1 for women, in the low and high education groups, respectively, over the whole projection period. Over the same period, Italian official projections estimate an increase of 3.7 years in life expectancy at age 65 for the whole population. Our results have relevant implications for retirement and ageing policies, in particular for those European countries that have linked statutory retirement age to variations in population life expectancies. In all the scenarios where the composition effect is not offset by a strong convergence of mortality differentials, we show that the statutory retirement age increases faster than the group-specific life expectancies, and this finding implies that the expected time spent in retirement will shrink for the whole population. This potential future outcome seems to be an unintended consequence of the indexation rule.

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