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
Date Written: November 30, 2011
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
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