ISBN: 3540440046
TITLE: Labor Markets and Social Security
AUTHOR: Addison, Welfens
TOC:

1 Introductory observations 1
1.1 A growing older society 1
1.2 The pension burden 2
1.3 Societal issues 3
1.4 Budgetary issues 4
2 Demography 5
2.1 Introductory observations 5
2.1.1 Uncertainty of projections 6
2.2 Population projections 7
2.2.1 Population in the developed countries 7
2.2.2 Population in the developing countries 8
2.2.3 Towards an older population 8
2.2.4 Old-age dependency 15
2.2.5 Towards a shrinking (and older) working age population 16
2.3 Demographic transition 17
2.3.1 Different patterns of aging 17
2.3.2 Aging, a feminist issue 19
2.3.3 Falling fertility rates 19
2.3.4 Longevity 20
2.4 Final observations 21
3 The impact of an aging population on the economy 23
3.1 Aging and capital formation 23
3.1.1 Increasing capital intensity 26
3.2 Aging and labour supply 26
3.3 The impact of aging on the performance of the economy 29
3.3.1 Single-country general equilibrium models 29
3.3.2 Multi-country general equilibrium models 30
3.3.3 Concluding observations 31
3.3.4 Productivity growth the most important factor 35
3.3.5 Remaining research questions 36
3.4 Final observations 36
4 Can the world population grow older comfortably ? 39
4.1 Scenarios of the demographic transition in developed countries 39
4.1.1 Aging and the labour market 39
4.1.2 Aging and the capital market 41
4.1.3 Labour force participation 42
4.1.4 Labour force productivity 43
4.1.5 Alternative scenarios 44
4.1.6 Decomposition 46
4.2 Scenarios of the demographic transition in developing countries 46
4.2.1 Demographic dividend 46
4.2.2 Alternative scenarios 47
4.3 Can the world population grow older comfortably? 48
4.3.1 Basic economics 49
4.3.2 Aging and welfare in the 21st century 49
4.3.3 Strain on political, social and economic systems 53
4.3.4 Alternative productivity growth rates 54
4.35 Required productivity growth to maintain welfare 57
4.4 Spending on welfare and intergenerational ethics 61
4.4.1 Concluding observations 62
5 A paradox 65
5.1 The budgetary issue 65
5.1.1 The budgetary issue - public pensions 65
5.1.2 The budgetary issue - health and long-term care 67
5.1.3 Aging, longevity and health care expenditures 68
5.2 A paradox 69
5.2.1 The method of pension finance - on a micro or personal level 69
5.2.2 The method of pension finance - on a macro or national level 70
5.2.3 The ownership of pension capital 71
5.2.4 No controversy between workers and pensioners 72
5.2.5 (Partial) shift from pay-as-you-go to funding 73
5.2.6 Pitfalls: the public versus private issue 75
5.3 Concluding observations 76
6 Policies in the face of aging 77
6.1 Introductory observations 77
6.2 Policy measures to enlarge the contribution or resource base 78
6.2.1 Shifting factor scarcity 79
6.2.2 Provisos 80
6.3 The impact of reform policy measures 81
6.3.1 Feedback mechanisms 82
6.3.2 Required labour force participation to maintain welfare 83
6.3.3 Policy measures in respect of pensions 86
6.3.4 Different views of the European Commission 87
6.3.5 Choosing a pension plan 'the third road' 88
6.3.6 Immigration 89
6.3.7 Required immigration to maintain welfare 90
6.3.8 Investing abroad 90
6.3.9 Towards active aging 93
6.4 Long-run trends 94
6.4.1 Social cohesion 95
6.4.2 A society for all ages 96
6.4.3 Concluding observations 97
7 Summarizing and concluding remarks 99
Abstract 103
References 105
Appendix A. Methodology 115
Appendix B. Alternative scenarios 121
Appendix C. Relative merits of pay-as-you-go and funding systems 127
Appendix D. Neo-classical economics in a growing older environment 133
Appendix E. Aging in the Netherlands 138
Appendix F. An optimal and preferred EU-15 pension reform strategy 149
Appendix G. Demography in the EU-15 countries 154
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