Population aging and retirement age policy: period balances, age rebalances and generation al imbalances

• Ano de defesa: 2019
• Autor(a) principal: Fernando Fernandes
• Orientador(a): Cássio Maldonado Turra
• Banca de defesa: Simone Wanjmann, Bernardo Lanza Queiroz, Luís Eduardo Afonso
• Tipo de documento: Tese
• Tipo de acesso: Acesso aberto
• Idioma: por
• Instituição de defesa: Universidade Federal de Minas Gerais
• Programa de Pós-Graduação: Programa de Pós-Graduação em Demografia
• Departamento: FACE - FACULDADE DE CIENCIAS ECONOMICAS
• País: Brasil
• Palavras-chave em Português: População; Envelhecimento; Política de aposentadoria; Estudos Multinacionais
• Link de acesso: http://hdl.handle.net/1843/30295

Population aging impacts retirement systems structured on period financial balances, known as pay-as-you-go (PAYG) systems, because it changes the ratio of the population 65 years of age and older (i.e., potential beneficiaries) to the population 20 to 64 years of age (i.e., potential contributors). Population aging also impacts the return of PAYG systems to birth cohorts, because changes in period relations between beneficiaries and contributors lead to distinct life cycle contributions and benefits among different birth cohorts. Our primary objective is to examine the extent to which population aging affects period balances and generational imbalances of PAYG systems. We concentrate on three specific objectives. First, we examine the contribution of births, deaths, and migrations to world population aging. Second, we analyze the burden of population aging in PAYG systems from a period perspective. Last, we investigate the effects of population aging on the returns of PAYG systems to birth cohorts. We draw data from the 2017 revision of the official United Nations population estimates and projections that covers 150 years from 1950 to 2100. First, we apply a mathematical expression introduced by Preston, Himes, and Eggers (1989), which decomposes the rate of change in the mean age of a population into the rejuvenating effects of births, deaths, and migrations. Second, we apply a method introduced by Bayo and Faber (1981) that adjusts the retirement age based on gains in the mean age at death. Last, we apply a mathematical expression introduced by Samuelson (1958) and expanded by Aaron (1966) to measure the return of PAYG systems to birth cohorts. We show that demographic transitions differ alongside a general concerted pattern between the rejuvenating effect of births and the rejuvenating effect of deaths. We propose a categorization of the stages of the demographic transition based on levels and indicators of the rejuvenating effects of births and deaths. Regarding the burden of population aging, we argue that policies that adjust the retirement age of PAYG systems based on gains in longevity are intrinsically ineffective, and when old-age mortality declines, policies based alternatively on gains in the modal age at death may be less ineffective. We also show that when populations age defined benefit (DB) PAYG systems are preferable to defined contribution (DC) PAYG systems because the former yields higher and less variable returns to birth cohorts. In addition, increasing the ratio of per capita benefits to per capita net wages of fixed relative position (FRP) PAYG systems may lead to lower and faster decreases of the returns to birth cohorts. We further claim that a higher fixed retirement age tends to increase the returns to birth cohorts of DB PAYG systems, and to decrease the returns to birth cohorts of DC PAYG systems. In PAYG systems that adjust the retirement age basedon gains in longevity, a higher retirement age tends to decrease the returns to birth cohorts of DB PAYG systems, and to increase the returns to birth cohorts of DC PAYG systems.