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The implications of demographic and economic projections on public pension spending in the European Union

Published online by Cambridge University Press:  09 March 2020

Beatriz Benítez-Aurioles
Beatriz Benítez-Aurioles*
Affiliation:
Department of Economics, University College London, London, UK
*
CONTACT Beatriz Benítez-Aurioles [email protected]
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Abstract

This paper analyses the implications that demographic and economic projections have on public pension spending in the European Union (EU). Using some stylised facts, we study the aging trends of the population, as well as labour force and employment projections. Indices of both demographic and economic dependence are built. All of this is used to determine the impact on public pension spending in the EU. Although we detect substantial heterogeneity of circumstances, we show that the states in which aging of the population weights more in explaining public pension expenditure growth as a percentage of gross domestic product (GDP) are generally the ones that make greater efforts to control this spending. Given the limited capacity of policies to increase active population or employment to offset the effects of aging, measures aimed at diminishing the generosity of the public pension system and at promoting private schemes have gained relevance.

Keywords

ProjectionspensionsEuropean Union
Type
Articles
Information
Journal of International and Comparative Social Policy , Volume 34 , Issue 1 , February 2018 , pp. 19 - 39
Copyright
Copyright © 2017 Informa UK Limited, trading as Taylor & Francis Group

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