Population Aging and Growth: the Effect of PAYG Pension Reform

Ken Tabata

No 125, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: This paper examines how pay-as-you-go (PAYG) pension reform from a defined-benefit scheme to a defined-contribution scheme affects economic growth in an overlapping generations model with endogenous growth. We show that in economies in which the old-age dependency ratio is relatively high and the size of pension benefits under a defined-benefit scheme is relatively large, PAYG pension reform from a defined-benefit scheme to a defined-contribution scheme mitigates the negative growth effect of population aging caused by a decline in the population growth rate or an increase in life expectancy.

Keywords: Population aging; PAYG pensions; Defined-benefit schemes; Definedcontribution schemes (search for similar items in EconPapers)
JEL-codes: D91 H55 O41 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2015-01, Revised 2015-01
New Economics Papers: this item is included in nep-age, nep-dge, nep-gro and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:125

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