Public pensions and population ageing: An economic analysis of fertility, migration and social-security policy

This thesis examines the relation between the changing demographic composition of the population and its economic, political and international consequences from an economic-theoretical point of view. The ample current interest in this subject needs little comment. In the OECD-countries, virtually no political or economic debate is safeguarded from ageing anxiety. The study consists of three parts. Part I, Beliefs and Fertility, presents some explanations for the decline in fertility in the second half of the twentieth century. Moreover, we will demonstrate that cranking up he birth rates offers a possibility to reform the existing public pension plans. Part II, Political Economy, demonstrates that a reform of the current public pension system may be politically feasible. Furthermore, we provide an alternative explanation for the generosity of the existing old-age social-security arrangements and the declining labour-force participation of elderly workers from a public-choice perspective. Finally, we will demonstrate that economic growth may not resolve the problems of population ageing. Part III, International Aspects, analyses the international spillovers of population ageing. In attempting to answer the question whether immigration provides a solution to the ageing problem, we will focus on the redistributive impact of migration. Moreover, we will demonstrate that migrants may be reluctant to migrate into regions with an ageing population.