The wealth of generations: Pensions and welfare from a macroeconomic perspective

In the upcoming decades, many countries will be confronted with an ageing population due to lower birth rates and increasing logevity. This will put existing pension and health care arrrangements under great pressure, which has led to a growing interest in the effects of demographic change and the design of pension schemes on the economy. This thesis investigates the macroeconomic consequences of population ageing and social security reform and the ensuing effects on the welfare of current and future generations. It considers aspects that so far have been neglected or received little attention in the economic literature. The first chapters deal with the increasing need for labour-intensive services by elderly individuals. They analyse the implications of ageing and a shift to a more funded pension scheme on the sectoral structure of the economy, and its consequences for wage inflation and productivity growth. The next chapter examines the international spillover effects caused by ageing and different degrees of funding between countries. The final chapter discusses endogenous fertility and analyses appropriate systems of child allowance for an ageing society with an unfunded pension scheme.