Pensions: More Information, Less Ideology

Europeans are living longer, and fewer now remain in the labour force as they grow older. Many European countries have responded to the ensuing financial pressure by reforming their public pension systems and health care programmes. There is considerable uncertainty as to the effects of these reforms – as they typically do not alter the unfunded nature of public welfare arrangements and this uncertainty is itself costly. Not only does it undermine the credibility of public welfare programmes, but it may also distort labour supply behaviour, decisions regarding savings and capital accumulation. More generally there is uncertainty about the overall impact of ageing on welfare and society and the multiple domains in which its effects may develop.
This text builds on the existing evidence – mostly in the field of public pensions – and highlights the advantages that would be obtained by: harmonizing methodologies used in the various countries to report pension outlays and forecast future pension liabilities or more generally public spending; defining common standards as to the frequency of expenditure forecasts and the length of the forecast horizons for welfare expenditures; and developing European longitudinal survey of persons pre- and post-retirement age, providing timely information on a wide array of decisions by individuals and household related to the ageing process and the ongoing trends.

Author Biography

Tito Boeri holds a Ph.D. in Economics from New York University; he has been senior economist at the OECD from 1987 to 1996. Currently he is Professor of Economics at Bocconi University, Milan.

Axel Börsch-Supan is Director of the Mannheim Research Institute for the Economics of Aging. He received a Ph.D. from MIT and taught at Harvard’s Kennedy School of Government before he moved back to Germany.

Agar Brugiavini is Professor of Economics at the University of `Ca’Foscari’ of Venice, Italy. She obtained a Ph.D. in Economics at the London School of Economics, United Kingdom and was recently awarded a Fulbright Fellowship at Northwestern University, USA.

Richard Disney is Professor of Economics at the University of Nottingham, a Research Fellow of the Institute for Fiscal Studies, London, and a Director of Axia Economics. He has acted as a consultant to OECD and the World Bank.

Arie Kapteyn is a senior economist at RAND. Before that he was the director of CentER at Tilburg University and professor of economics. Franco Peracchi (Ph.D., Princeton University, 1987) is a Professor of Econometrics at Tor Vergata University in Rome.