Population ageing and the international capital market

Abstract This paper analyses the effects of ageing on the international capital market. The first part applies a simple model and distinguishes between the cases of a small open economy and a closed economy to explore the separate effects of ageing, the design of pension schemes and government policy on savings, labour supply and the interest rate. The second part of the paper analyses cross-border capital flows and spillover effects caused by international differences in ageing patterns, pension schemes and policy reactions. The final part is devoted to the quantitative effects found by various recent simulation studies

Population ageing and the international capital market

Abstract This paper analyses the effects of ageing on the international capital market. The first part applies a simple model and distinguishes between the cases of a small open economy and a closed economy to explore the separate effects of ageing, the design of pension schemes and government policy on savings, labour supply and the interest rate. The second part of the paper analyses cross-border capital flows and spillover effects caused by international differences in ageing patterns, pension schemes and policy reactions. The final part is devoted to the quantitative effects found by various recent simulation studies

"Better Safe than Sorry" - Individual Risk-free Pension Schemes in the European Union - Macroeconomic Benefits, the Mobile Working Citizen's Perspective and Why Nots

Variations between the diverse pension systems in the member states of the European Union hamper labour market mobility, across country borders but also within the countries of the European Union. From a macroeconomic perspective, and in the light of demographic pressure, this paper argues that allowing individual instead of collective pension building would greatly improve labour market flexibility and thus enhance the functioning of the monetary union. I argue that working citizens would benefit, for three reasons, from pension saving in a risk-free savings account. First, citizens would have a clear picture of the accumulation of their own pension savings throughout their working life. Second, they would pay hardly any extra costs and, third, once retired they would not be subject to the whims of government or other pension fund managers. This paper investigates the feasibility of individual pension building under various parameter settings by calculating the pension saved during a working life and the pension dis-saved after retirement. The findings show that there are no reasons why the European Union and individual member states should not allow individual risk-free pension savings accounts. This would have macroeconomic benefits and provide a solid pension provision that can enhance mobility, instead of engaging workers in different mandatory collective pension schemes that exist around in the European Union

Social capital and health across European countries

In this article we compare the effect of trust and civic participation on self-assessed health across 10 European countries. We find that, after controlling for a rich set of socio-economic characteristics, for actual health status and for health-related behaviours, trust has a significantly positive effect on perceived health in Sweden and Germany, but none in the other countries. Civic participation does have a positive and quite similar effect in all countries. Our conclusion is that they measure two different aspects of social capital that must be treated separately.

Coordination of Pension Provision in a Divided Europe: The Role of Citizens' Preferences

This paper explores the underlying factors which explain the diversity in public opinion of EU citizens on the preferred way of financing pensions and the implications for international policy coordination. We find that preferences are mainly determined by the current pension provision and unspecified nation-specific effects, while personal characteristics only play a minor role. Furthermore, some countries have substantial regional differences, others have rather homogeneous regions. Overall, our results suggest that policy making on pension financing at the EU level is not feasible, the more so when taking regional differences into account. Policy coordination within several subgroups of countries whose citizens share similar opinions would be a more realistic option

Coordination of Pension Provision in a Divided Europe: The Role of Citizens' Preferences

This paper explores the underlying factors which explain the diversity in public opinion of EU citizens on the preferred way of financing pensions and the implications for international policy coordination. We find that preferences are mainly determined by the current pension provision and unspecified nation-specific effects, while personal characteristics only play a minor role. Furthermore, some countries have substantial regional differences, others have rather homogeneous regions. Overall, our results suggest that policy making on pension financing at the EU level is not feasible, the more so when taking regional differences into account. Policy coordination within several subgroups of countries whose citizens share similar opinions would be a more realistic option

Growing old and staying young: population policy in an ageing closed economy

Child allowances, Endogenous fertility, Pensions, D10, H55, J13,

Pensions with heterogenous individuals and endogenous fertility

Pay-as-you-go social security, Endogenous fertility, Redistribution, H55, J13,