Generational Impacts of Demographic Changes in Pay-as-you-go Pension Schemes: Measurement and Application to the Netherlands

摘要

Rising longevity and falling fertility threaten the sustainability of pay-as-you-go pension schemes and have major implications for the distribution across generations. This paper shows that keeping generational accounts of the Dutch pay-as-you-go pension scheme constant since the introduction of this scheme in 1957 in the face of subsequent demographic changes would have required a gradual increase of the entitlement age. For the baby boom generations born between 1945 and 1960, we calculate a required increase in the entitlement age of between four and seven years to offset the generational impact of longer life expectancy and lower fertility.