IZA DP No. 7144: Population Ageing and PAYG Pensions in the OLG Model
published in: Journal of Population Economics, 2014, 27 (1), 251-256
This paper shows the effects on a pay-as-you-go pension system of the demographic change in the standard overlapping generations model. Firstly, we consider a setting with exogenous fertility and then a model with endogenous fertility. In both cases, population ageing due to increased longevity implies a reduction in pensions payouts.