Abstract
The social security reform wave in the 1990s and the early 2000s responded to the rising deficits of the public PAYG (pay-as-you-go) systems. Privatisation of social security was regarded as a cure for the population ageing problem believed to lie under the situation. Some academics were sceptic and argued that privatisation was not a remedy to the ageing problem. This paper empirically investigates the validity of this claim. Using a simple market equilibrium condition, the implications of the ageing population for saving rates are examined for more than 150 countries for the 2000 to 2100 period. It is found that ageing may cause unsustainability in funded pension systems. The impact is especially profound for southern and eastern European countries, Korea, and Japan.
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