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Recent years have seen a surge in empirical research on retirement behavior and the impact of pension reforms. This column presents a new eBook that reviews insights from the newest advances in research on retirement policy and provides fresh perspectives on how to (re)think pension reforms.
In many countries, pensions are the largest single item of public expenditure. The average OECD country devotes close to 18% of total public expenditure or 8% of GDP on pensions. Pension expenditure is projected to increase by about 1.5 percentage points of GDP by 2050, with several countries expected to experience rises of up to 6 percentage points of GDP (OECD 2023). To alleviate these fiscal pressures, governments around the world have implemented far-reaching reforms of public pension systems, and in many cases, further reforms are planned. Whilst the specific design features of those reforms are complex and varied, a widely shared common objective is to encourage later retirement.
Building on a classic literature on public and labour economics, a new body of empirical work has significantly advanced our understanding of ‘what works’ in retirement policy. In a new CEPR eBook (Giupponi and Seibold 2024a), we review insights from the latest advances in this literature. Delving into the manifold aspects of pension reforms, we offer a comprehensive analysis of the functioning and effectiveness of policy levers designed to encourage later retirement, and we highlight their fiscal, insurance, and redistributive implications. Our ultimate purpose is to distill practical policy lessons that can inform the intense ongoing debates around pension reform....
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