Demographic Change Across the Globe - Maintaining Social Security in Ageing Economies

World Economics, Vol. 13, No.2, pp. 75-97, 2012

23 Pages Posted: 7 Dec 2011 Last revised: 16 Jun 2012

See all articles by Marga Peeters

Marga Peeters

De Nederlandsche Bank

Loek F. M. Groot

Utrecht University - School of Economics

Date Written: November 30, 2011

Abstract

This paper investigates the fiscal pressure from demographic change in relation to the labor market space for fifty countries that cover 75% of the world population. The pressure-to-space indicator ranks Poland, Turkey and Greece high. Apart from Turkey and India, developing countries rank low due to low spending on the old (pensions, health care) and the young (education, family costs). Peculiarly, economies with higher pressure have more space. The hypothesis that aging economies have started using their space in anticipation to higher demographic pressure is rejected. Raising the retirement age in developed economies by five years alleviates the pressure by almost 30% and creates 10% more labor market space.

Keywords: demography, dependency rates, labour market, social security, pensions, government spending

JEL Classification: D6, E24, E62, H51, H52, H53, H55, J0, J11, J18, J21, J26, O57

Suggested Citation

Peeters, Marga and Groot, Loek F. M., Demographic Change Across the Globe - Maintaining Social Security in Ageing Economies (November 30, 2011). World Economics, Vol. 13, No.2, pp. 75-97, 2012, Available at SSRN: https://ssrn.com/abstract=1969361 or http://dx.doi.org/10.2139/ssrn.1969361

Marga Peeters (Contact Author)

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

Loek F. M. Groot

Utrecht University - School of Economics ( email )

Kriekenpitplein 21-22
Adam Smith Building
Utrecht, 3584 EC
Netherlands

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