Demographic Change, Social Security Systems, and Savings

David Bloom, David Canning, Rick Mansfield and Michael Moore

No 12621, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In theory, improvements in healthy life expectancy should generate increases in the average age of retirement, with little effect on savings rates. In many countries, however, retirement incentives in social security programs prevent retirement ages from keeping pace with changes in life expectancy, leading to an increased need for life-cycle savings. Analyzing a cross-country panel of macroeconomic data, we find that increased longevity raises aggregate savings rates in countries with universal pension coverage and retirement incentives, though the effect disappears in countries with pay-as-you-go systems and high replacement rates.

JEL-codes: E1 J2 (search for similar items in EconPapers)
Date: 2006-10
New Economics Papers: this item is included in nep-mac and nep-pbe
Note: AG EFG LS PE
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Published as Bloom, David E. & Canning, David & Mansfield, Richard K. & Moore, Michael, 2007. "Demographic change, social security systems, and savings," Journal of Monetary Economics, Elsevier, vol. 54(1), pages 92-114, January.

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Journal Article: Demographic change, social security systems, and savings (2007)
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