Social Security and Public Insurance

Forthcoming in Piggott, J. and Woodland, A. (Eds.), Handbook of the Economics of Population Aging, Elsevier

Max Planck Institute for Social Law and Social Policy Discussion Paper No. 04-2016

101 Pages Posted: 6 Oct 2016

See all articles by Axel H. Börsch-Supan

Axel H. Börsch-Supan

Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA)

Klaus Härtl

Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA)

Duarte Nuno Leite

Max Planck Institute for Social Law and Social Policy; Universidade do Porto - CEF.UP - Center for Economics and Finance at UP

Date Written: September 8, 2016

Abstract

When the challenges of population aging are being debated, the uncertain future of pension systems is a topic of high priority and large controversy. The aim of this chapter is not to provide a “consensus view” on social security and public insurance in aging populations but to put structure on these debates. We formulate a large set of models which we use for simulation exercises to make the challenges and controversies more transparent. The chapter begins with an institutional view of pension systems and population aging which defines the fundamental accounting restrictions which population aging imposes on individual behavior and policy actions. We also provide a brief survey of pension systems in the real world. We then take a behavioral view and study saving and labor supply decisions in an aging population. The third viewpoint is from macroeconomics and focuses on the feedback effects that occur in general equilibrium. We demonstrate that market reactions to population aging significantly reduce the burden of parametric or systemic pension reform. The chapter ends with a short summary of the main lessons and an outlook where further research is most urgently needed.

Keywords: population aging, social security, public insurance, pension reform, life-cycle saving, labor supply, retirement age, welfare, intergenerational risk sharing

JEL Classification: C68, D64, D91, E17, E21, F21, H55, J11, J22, J26

Suggested Citation

Börsch-Supan, Axel H. and Härtl, Klaus and Leite, Duarte Nuno, Social Security and Public Insurance (September 8, 2016). Forthcoming in Piggott, J. and Woodland, A. (Eds.), Handbook of the Economics of Population Aging, Elsevier; Max Planck Institute for Social Law and Social Policy Discussion Paper No. 04-2016. Available at SSRN: https://ssrn.com/abstract=2848218 or http://dx.doi.org/10.2139/ssrn.2848218

Axel H. Börsch-Supan (Contact Author)

Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA) ( email )

Amalienstrasse 33
Munich, 80799
Germany

HOME PAGE: http://www.mea.mpisoc.mpg.de

Klaus Härtl

Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA) ( email )

Amalienstrasse 33
Munich, 80799
Germany
+49-(0)89-38602-351 (Phone)

HOME PAGE: http://mea.mpisoc.mpg.de/index.php?id=230&no_cache=1&tx_meamitarbeiteranzeige_pi1[showUid]=1133&cHas

Duarte Nuno Leite

Max Planck Institute for Social Law and Social Policy ( email )

Amalienstraße 33
München, 80799
Germany

Universidade do Porto - CEF.UP - Center for Economics and Finance at UP ( email )

Rua Dr. Roberto Frias
Porto, 4200-464
Portugal

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