Controlling the Effects of Demographic Risks: The Role of Pension Indexation Schemes

Juha M. Alho; Svend E. Hougaard Jensen; Jukka Lassila; Tarmo Valkonen

doi:10.1017/S1474747205001940

Controlling the Effects of Demographic Risks: The Role of Pension Indexation Schemes

Juha M. Alho, Svend E. Hougaard Jensen, Jukka Lassila, Tarmo Valkonen

University of Southern Denmark

Research output: Contribution to journal › Journal article › Research › peer-review

Abstract

Within a model featuring demographic uncertainty, this paper studies a pension reform where public pension benefits are indexed to the total wage bill rather than to the average wage level. This implies a decline in the variability of contribution rates and an increase in the variability of replacement rates. While thus shifting some of the adjustment burden following demographic shocks to pensioners, the trade-off in risks is found to be fairly moderate.

Original language	English
Journal	Journal of Pension Economics and Finance
Volume	4
Issue number	2
Pages (from-to)	139 - 153
Number of pages	21
ISSN	1474-7472
DOIs	https://doi.org/10.1017/S1474747205001940
Publication status	Published - 2005

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title = "Controlling the Effects of Demographic Risks: The Role of Pension Indexation Schemes",

abstract = "Within a model featuring demographic uncertainty, this paper studies a pension reform where public pension benefits are indexed to the total wage bill rather than to the average wage level. This implies a decline in the variability of contribution rates and an increase in the variability of replacement rates. While thus shifting some of the adjustment burden following demographic shocks to pensioners, the trade-off in risks is found to be fairly moderate.",

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AU - Valkonen, Tarmo

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AB - Within a model featuring demographic uncertainty, this paper studies a pension reform where public pension benefits are indexed to the total wage bill rather than to the average wage level. This implies a decline in the variability of contribution rates and an increase in the variability of replacement rates. While thus shifting some of the adjustment burden following demographic shocks to pensioners, the trade-off in risks is found to be fairly moderate.

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KW - Demografi

KW - Pensionspolitik

KW - Pensionsreformer

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DO - 10.1017/S1474747205001940

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