Macroeconomic effects of pension reforms in the context of aging populations: overlapping generations model simulations for Tunisia

Tahar Abdessalem and Houyem Chekki Cherni

Middle East Development Journal, 2016, vol. 8, issue 1, 84-108

Abstract: We have developed a general equilibrium overlapping generations’ model to evaluate the effects of demographic transition in Tunisia and to discuss the impacts of pension reforms. Simulations consider two scenarios: a benchmark scenario (without reforms) and a policy-change scenario, including a set of pension reforms: contribution rate increase, pensions’ level reduction, rise of the retirement age and finally the introduction of a complementary fully funded system. The latter incorporates a specific hypothesis consisting in differentiated returns for free saving (private) and compulsory (pension funds). Simulation results indicate that population aging could have a major impact on the saving rate, factors prices and economic growth. However, they also indicate that policy reforms could reduce the negative effects.

Date: 2016
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Working Paper: Macroeconomic Effects of Pension Reforms in the Context of Ageing Populations: Overlapping Generations Model Simulations for Tunisia (2011)
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DOI: 10.1080/17938120.2016.1150007

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