Beggar thy thrifty neighbour: The international spillover effects of pensions under population ageing

Y. Adema, A.C. Meijdam, H.A.A. Verbon

Research output: Contribution to journalArticleScientificpeer-review

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Abstract

This paper explores the international spillover effects of ageing through capital markets when countries have different pension systems. We use a two-country two-period overlapping-generations model, where the two countries only differ in their pension schemes. Two forms of population ageing are considered, namely, an increase in longevity and a fall in fertility. It is shown that, in the long run, a country using a funded pension system experiences negative spillovers from the fact that the other country uses a pay-as-you-go system. The short-run spillovers, however, are opposite to the spillovers in the long run.
Original languageEnglish
Pages (from-to)933-959
JournalJournal of Population Economics
Volume21
Issue number4
Publication statusPublished - 2008

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pension
pay-as-you-go
capital market
fertility
International spillovers
Population aging
Spillover
Spillover effects
Pensions
experience
Pension system

Cite this

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title = "Beggar thy thrifty neighbour: The international spillover effects of pensions under population ageing",
abstract = "This paper explores the international spillover effects of ageing through capital markets when countries have different pension systems. We use a two-country two-period overlapping-generations model, where the two countries only differ in their pension schemes. Two forms of population ageing are considered, namely, an increase in longevity and a fall in fertility. It is shown that, in the long run, a country using a funded pension system experiences negative spillovers from the fact that the other country uses a pay-as-you-go system. The short-run spillovers, however, are opposite to the spillovers in the long run.",
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Beggar thy thrifty neighbour : The international spillover effects of pensions under population ageing. / Adema, Y.; Meijdam, A.C.; Verbon, H.A.A.

In: Journal of Population Economics, Vol. 21, No. 4, 2008, p. 933-959.

Research output: Contribution to journalArticleScientificpeer-review

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T2 - The international spillover effects of pensions under population ageing

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AB - This paper explores the international spillover effects of ageing through capital markets when countries have different pension systems. We use a two-country two-period overlapping-generations model, where the two countries only differ in their pension schemes. Two forms of population ageing are considered, namely, an increase in longevity and a fall in fertility. It is shown that, in the long run, a country using a funded pension system experiences negative spillovers from the fact that the other country uses a pay-as-you-go system. The short-run spillovers, however, are opposite to the spillovers in the long run.

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