Ageing population and pension system sustainability: reforms and redistributive implications

Davide Bazzana ()
Additional contact information
Davide Bazzana: Università degli Studi di Brescia

Economia Politica: Journal of Analytical and Institutional Economics, 2020, vol. 37, issue 3, No 9, 992 pages

Abstract: Abstract The paper presents an agent-based model developed to investigate the relationship between retirement age and pension system sustainability taking into account the redistributive implication. Moreover, we investigate the role that the government can play in reducing inequality by implementing debt stabilisation policies, as for example applying a property tax. Results show that delaying the retirement age is an effective policy to raise the pension scheme sustainability. However, there is an emerging trade-off between the pension system sustainability and the extension of the pension benefits that may have intergenerational implications. Pension reforms which reduce the pension age threshold or increase the paid benefit will rise the overall pension expenditure and will negatively affect the public debt evolution which may require some stabilisation measures, as the implementation of positive property taxation. The effects of the property taxation on the debt reduction and the level of equality in the population’s wealth distribution strongly depends on the progressivity of the measure and on the size of the taxpayer population involved. The analysis evidences the crucial role played by the age dependency ratio both in achieving the pension system sustainability and in assuring the wealth distribution within the population.

Keywords: Pension system reform; Ageing; Fiscal sustainability; Inequality; Pay-as-you-go; Heterogeneity (search for similar items in EconPapers)
JEL-codes: C63 D63 E62 H55 J26 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1007/s40888-020-00183-8 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:epolit:v:37:y:2020:i:3:d:10.1007_s40888-020-00183-8

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40888

DOI: 10.1007/s40888-020-00183-8

Access Statistics for this article

Economia Politica: Journal of Analytical and Institutional Economics is currently edited by Alberto Quadrio Curzio

More articles in Economia Politica: Journal of Analytical and Institutional Economics from Springer, Fondazione Edison
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().