Journal Article

Ageing and the welfare state: securing sustainability

Volker Meier and Martin Werding

in Oxford Review of Economic Policy

Published on behalf of The Oxford Review of Economic Policy Ltd

Volume 26, issue 4, pages 655-673
Published in print January 2010 | ISSN: 0266-903X
Published online January 2010 | e-ISSN: 1460-2121 | DOI: https://dx.doi.org/10.1093/oxrep/grq031
Ageing and the welfare state: securing sustainability

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  • National Budget, Deficit, and Debt
  • Demographic Economics
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Over the next four decades, increasing old-age dependency ratios will exert an enormous upward pressure on welfare spending in most developed countries. As this is mainly due to existing unfunded public pension schemes, many countries have embarked on far-reaching reforms in this area, strengthening actuarial fairness, modifying indexation rules, adding elements of pre-funding, and, last but not least, attempting to extend the period of economic activity. Efforts to contain costs may also be relevant with regard to public expenditure on health and long-term care but, thus far, no country has started to really deal with these issues. Still, some countries have made substantial progress in securing the long-term sustainability of their welfare systems. What remains to be considered is re-constructing the system of intergenerational transactions as a potential way of removing disincentives to raise children and invest in their human capital in the long run.

Keywords: ageing; public pensions; sustainability; welfare state; health care; H50; H68; J11

Journal Article.  8780 words.  Illustrated.

Subjects: National Budget, Deficit, and Debt ; Demographic Economics ; National Government Expenditures and Related Policies

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