Population ageing and labor market frictions. An OLG model applied to Lebanon

Marie Claude Kamar () and Riccardo Magnani
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Marie Claude Kamar: Université Saint Joseph

No 3, Working Papers from SITES

Abstract:

We evaluate the effects of population ageing on the macroeconomic evolution of the Lebanese economy and on the financial sustainability of its major pension schemes. We use an OLG model with labor market frictions in the as in de la Croix et al. (2013). Individuals are differentiated by age, gender, and education and choose the sector of activity, which implies that the size of the informal sector is endogenous. We assess the long-run implications of population ageing and show that the public sector pension scheme is unsustainable while the private sector scheme is insufficient to ensure decent living standards for the elderly. Finally, we evaluate the effects of two pension reforms; in the first one we propose a mix of measures aiming at guaranteeing the sustainability of the public sector scheme; in the second one we propose some measures aiming at increasing the size of the private sector scheme.

Keywords: Pensions; Population ageing; OLG models; Labor market frictions (search for similar items in EconPapers)
JEL-codes: E62 H55 J11 (search for similar items in EconPapers)
Date: 2022-04
New Economics Papers: this item is included in nep-age, nep-ara and nep-dge
Note: SITES Working Papers 3
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