In many European countries, population aging had led to debate about aswitch from conventional unfunded public pension systems to notional sys-tems characterized by individual accounts. In this article, we develop anoverlapping generations model in which endogenous growth is based on anaccumulation of knowledge driven by the proportion of skilled workers andby the time they have spent in training. In such a framework, we show thatconventional pension systems, contrary to notional systems, can enhance eco-nomic growth by linking bene ts only to the partial earnings history. Thus,to ensure economic growth, the optimal adjustment to increased longevitycould consist in increasing the size of existing retirement systems rather thanswitching to notional systems.
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