The Economic Implications of Aging Societies: The Costs of Living Happily Ever After

Cover......Page 1
Half-title......Page 3
Title......Page 5
Copyright......Page 6
Dedication......Page 7
Contents......Page 9
Figures and Tables......Page 13
Preface......Page 23
Acknowledgments......Page 25
ONE Introduction......Page 29
A Brief Historical Perspective......Page 36
Underlying Forces Driving Changing Population Structures......Page 39
How Quickly Will Life Expectancy Increase?......Page 41
Changing Fertility Rates......Page 45
Immigration Rates......Page 48
Evolving National Populations......Page 50
National Population Age Structures......Page 53
The Prospects of Growing Aging Dependency......Page 61
THREE Pension Options, Motivations and Choices......Page 63
Retirement Plans as a Consumption Allocation Mechanism......Page 64
Approaches to Financing Pensions......Page 65
How Hard Is It to Predict Future Demography?......Page 69
Literature Cited......Page 70
Factors behind National Retirement Choices......Page 71
Why Pay-Go Pensions Became So Popular......Page 78
New Realities Spur New Considerations on Pension Choices......Page 83
Demographics and the Efficiency of Alternative Pension Systems......Page 84
Labor Supply Patterns and the Efficiency of Alternative Pension Systems......Page 85
Interest Rates and Wage Growth and the Efficiency of Alternative Pension Systems......Page 92
Aging Populations in the Context of Total Economic Dependency......Page 96
New Realities Raise Concerns for Policy Analysts......Page 106
Contemporary Approaches to Providing Income Security for the Elderly......Page 109
Public First Tiers in the Retirement System......Page 110
Public Second Tiers in the Retirement System......Page 112
Australian Mandatory Superannuation: Strengths and Weaknesses......Page 113
Further Reading......Page 114
Employer-Sponsored Third Tiers in the Retirement System......Page 116
Retirement Ages, Retirement Patterns, and Retiree Populations......Page 120
Early Retirement in Belgium......Page 121
Retiree Income Levels......Page 129
Sources of Retiree Income......Page 131
FIVE Retirement Systems and the Economic Costs of Aging......Page 135
Consumption and Savings Rates under Alternative Retirement Systems......Page 136
Retirement Saving Versus Consumption Loans......Page 137
Another View of Consumption and Savings Rates under Retirement Systems......Page 140
The U.S. Social Security Trust Fund: Does It Represent Extra Savings?......Page 142
Retirement Patterns under Alternative Retirement Systems......Page 149
Retirement Living Standards under Alternative Retirement Systems......Page 150
What Appears to be Pension Funding Might not be Real Funding......Page 151
Funded Pensions Cannot Overcome All Demographic Challenges......Page 153
Pension Transitions are Costly and Raise Equity Issues......Page 154
SIX Beyond Pensions to Health Care Considerations......Page 157
Age and Health Consumption Patterns......Page 158
Factors Other than Aging Driving Up Health Costs......Page 163
Longer Lives and Health Care Consumption in Old Age......Page 167
Explaining the Intensity Spiral in Health Care Consumption......Page 171
Policy Concerns over the Evolution of Health Technology......Page 173
Long-Term Care Provision in Changing Societies......Page 177
The Health Care Dilemma......Page 179
SEVEN Labor Supply and Living Standards......Page 182
Building Blocks for Producing National Output......Page 184
The Story behind Changing Labor Productivity Levels......Page 188
Improving Productivity Leads to Improved Living Standards......Page 191
Demographics and Output Demand......Page 193
The Linkages between Output Demand and Labor Demand......Page 200
The Foundation for Growth in the Coming Decades......Page 206
Retirement Systems ’Role in Determining Retirement Burden Levels......Page 210
EIGHT Too Many Wants or Too Few Workers?......Page 221
Framework and Baseline for Viewing the Labor Market Options......Page 222
Increasing Labor Force Participation Generally......Page 225
Increasing Female Labor Force Participation Rates......Page 227
Increasing Labor Force Participation of Older People......Page 228
Increasing Labor Force Participation of Young Adults......Page 229
The Perils of Low Immigration in an Era of Global Aging......Page 236
Capital Deepening as a Possible Alternative to Additional Labor Supply......Page 240
Utilizing Existing Human Capital More Efficiently......Page 254
TEN Aligning Retirement Policy with Labor Needs......Page 260
The Role of Plan Structure on Retirement and Work Behavior......Page 261
Factors Affecting Early Labor Force Withdrawals......Page 267
Effects of Occupational Programs on Labor Markets......Page 273
Can We Make the Retirement Age More Flexible? The Swiss Debate......Page 282
Workforce Incentives Created by Non-Employment Benefits......Page 284
Case Studies of Nations Shifting to Funded Pensions......Page 290
Asset Management and Utilization in Funded Pension Systems......Page 295
Investing Pension Funds in Government Bonds......Page 298
Constrained Asset Allocations for Government Pensions: The Canadian Case......Page 300
The Swedish Premium Pension System......Page 303
References......Page 304
Foreign Investment as a Means to Achieving Fair Returns......Page 305
Potential International Demand for Pension Fund Savings......Page 311
Pursuing Higher Labor Force Participation Levels......Page 316
Pursuing Higher Rates of Productivity Growth......Page 319
Spreading the Benefits of Added Economic Growth......Page 323
Investing in Developing Economies......Page 331
THIRTEEN Risks Associated with Alternative Public Policies......Page 341
Insuring Against Economic Risks during the Working Period......Page 343
Gender Issues in Social Security Reforms......Page 346
References......Page 349
Insuring against Economic Risks during the Retirement Period......Page 356
The Annuitization Problem......Page 357
References......Page 358
References......Page 362
The Risks of Denial of a Problem......Page 364
Political Risks from Delay in Addressing Aging Issues......Page 371
FOURTEEN Roadmap to the Future......Page 377
Principles for Reforming National Pensions......Page 378
The Citizen’s Pension......Page 379
Saving Through Retirement Savings Programs Increases Flexibility......Page 380
Constrained Asset Allocations for Government Pensions: The Canadian Case......Page 382
Pension Reform should Provide Equitable Treatment between Participants......Page 383
The Pension System should be Structured to Encourage Economic Efficiency......Page 384
Keep Administrative Costs Low......Page 385
Annuitization should be on a Joint and Survivor Basis for Couples......Page 386
Pension Reforms should be Explicit and Transparent......Page 387
Pension Reforms should be Undertaken as soon as Possible......Page 388
The Developing World: A Short Window to Address Global Ageing Issues......Page 389
Principles for Reforming Employer-Based Pensions......Page 390
Bringing Health Care under Control......Page 391
Facilitating Cross-National Capital Flows......Page 395
Conclusion......Page 397
Index......Page 401