Does funding of pensions stimulate economic growth?*

E Davis () and Yu-Wei Hu ()

Journal of Pension Economics and Finance, 2008, vol. 7, issue 2, 221-249

Abstract: Debate over superiority of pension funding over pay-as-you-go links notably to the question whether funding improves economic performance sufficiently to generate additional resources to meet the needs of an ageing population. To address this issue, we design a modified Cobb–Douglas production function with pension assets as a shift factor, and investigate the direct link between pension assets and economic growth employing a dataset covering up to 38 countries, using a variety of appropriate econometric methods. We find positive results for both OECD countries and Emerging Market Economies (EMEs), with consistent evidence for a larger effect for EMEs than OECD countries.

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:cup:jpenef:v:7:y:2008:i:02:p:221-249_00

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