The Hidden Public Pension Obligations in Six European States: A Generational Accounting Perspective

16 Pages Posted: 21 Sep 2003

Abstract

Prior accounting research has assumed that public sector pensions are fully funded. However, with ageing populations, many European governments provide old age social security by implicitly transferring wealth from a declining base of younger generation contributors to a growing number of older generation pension recipients. Generational accounting is applied to measure obligations of six European governments to these unfunded, pay-as-you-go pension systems (PAYG). Generational accounts for each of five generational cohorts in respect of unfunded PAYG obligations of six European governments are projected over the period 1990-2050, showed that the extent of inter-generational transfers is related to differences in labour participation rates, generosity and scope of the public pension system, and the age dependency ratio.

JEL Classification: H25, M41, M47, M48

Suggested Citation

Klumpes, Paul J.M., The Hidden Public Pension Obligations in Six European States: A Generational Accounting Perspective. Accounting Forum, Vol. 27, pp. 185-200, June 2003. Available at SSRN: https://ssrn.com/abstract=422043

Paul J.M. Klumpes (Contact Author)

Nottingham Trent University ( email )

Burton Street
Nottingham NG1 4BU, NG1 4LN
United Kingdom

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