Macroeconomic effects of pension reforms in the context of aging populations: overlapping generations model simulations for Tunisia. Issue 1 (2nd January 2016)

• Record Type: Journal Article
• Authors: Abdessalem, Tahar; Chekki Cherni, Houyem
• Is Part Of: Middle East development journal. Volume 8:Issue 1(2016)
• Page Start: 84
• Page End: 108
• Publication Date: 2016-01-02
• Subjects: pay-as-you-go system -- funded pension -- aging population -- overlapping generations; D91 -- H55 -- J26; Middle East -- Economic conditions -- 1979- -- Periodicals; Economic forecasting -- Middle East -- Periodicals; Africa -- Economic conditions -- 1960- -- Periodicals; Economic forecasting -- Africa -- Periodicals; Economic forecasting; Economic history; Africa; Middle East; Periodicals; 338.95605
• DOI: 10.1080/17938120.2016.1150007
• Languages: English
• ISSNs: 1793-8120

Abstract

Abstract : We have developed a general equilibrium overlapping generations' model to evaluate the effects of demographic transition in Tunisia and to discuss the impacts of pension reforms. Simulations consider two scenarios: a benchmark scenario (without reforms) and a policy-change scenario, including a set of pension reforms: contribution rate increase, pensions' level reduction, rise of the retirement age and finally the introduction of a complementary fully funded system. The latter incorporates a specific hypothesis consisting in differentiated returns for free saving (private) and compulsory (pension funds). Simulation results indicate that population aging could have a major impact on the saving rate, factors prices and economic growth. However, they also indicate that policy reforms could reduce the negative effects.