BY: M. BUETLER
Tilburg University, Center for Economic Research
GEORG KIRCHSTEIGER
Tilburg University, Center for Economic Research
Paper ID: Tilburg University, Center for Economic Research
(CentER) Working Paper No. 1999-37
Date: 1999
Contact: M. BUETLER
Email: Mailto:monika at kub.nl
Postal: Tilburg University, Center for Economic Research
P.O. Box 90153
5000 LE Tilburg, THE NETHERLANDS
Phone: +31 13 466 2938
Fax: +31 13 466 3066
Co-Auth: GEORG KIRCHSTEIGER
Email: Mailto:G.Kirchsteiger at kub.nl
Postal: Tilburg University, Center for Economic Research
P.O. Box 90153
5000 LE Tilburg, THE NETHERLANDS
Paper Requests:
Contact Ingrid Meeder, Mailto:I.Meeder at kub.nl
Phone:+31.13.466.3050. Postal: CentER, Tilburg University, P.O.
Box 90153, 5000 LE Tilburg, The Netherlands.
ABSTRACT:
Social security systems in most industrialized countries face
severe financial problems due to adverse demographic changes.
The increase in old-age dependency, however, will be spread over
a period of approximately 50 years. The degree of technological
progress necessary to offset the negative effects of aging might
therefore be small. Using models with endogenous labor supply
and with capital accumulation, we demonstrate that under
plausible assumptions, current living standards can be
maintained with a moderate rate of technological progress. The
necessary rate of growth increases both in the size of the
program and in the fraction of agents who exclusively depend on
public pensions in retirement.
JEL Classification: H55, J18, O40