OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

The Problems and Prospects Faced by Pay-As-You-Go Pension Systems

A Case Study of Greece

Without further reforms, pay-as-you-go pension systems throughout most of continental Europe face unsustainable financial imbalances as their population ages. Though this paper describes the Greek pension system, which will face especially severe financial strains, it sheds light on the pension problems of other continental European countries, as these countries’ systems share many common features. The main focus of the paper is on the factors of the Greek pay-as-you-go system which result in its future unsustainability. Exacerbating the deteriorating demographics, the system is characterised by very generous pensions relative to contributions for the pre-1993 generation of workers, as well as other incentives/provisions to retire early. To highlight these facets, the study provides simulations of the generosity of different categories of individual pensions under different scenarios as well as projections of aggregate pension expenditures and revenues. It concludes with options ...


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