OECD Pension reform: the role of demographic trends and the business cycle

Open Access
Authors
Publication date 03-2023
Journal European Journal of Political Economy
Article number 102280
Volume | Issue number 77
Number of pages 18
Organisations
  • Faculty of Economics and Business (FEB) - Amsterdam School of Economics Research Institute (ASE-RI)
  • Faculty of Economics and Business (FEB)
Abstract Using a new real-time dataset from Beetsma et al . (2020) containing all pension
reform measures in 23 OECD countries between 1970 and 2017, we demonstrate that, in contrast to what one might a priori expect, the timing of pension reform measures coincides with business cycle shocks and not with current or projected demographic shocks. The OECD-wide demography only explains the general reform trend. We rationalise this finding using a political-economy model with two-sided adjustment costs to explain a lack of response of pension reform measures to changes in demographic indicators.
Document type Article
Language English
Published at https://doi.org/10.1016/j.ejpoleco.2022.102280
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