Retirement, Pension Reform, and Lifecycle Pension Wealth: An International Comparison

Sang-Hyop Lee, University of Hawaii at Manoa

This study considers the effect of the later retirement and an increase in pensionable age on old age support system by using a larger study of the economic life-cycle, the National Transfer Accounts (NTA). The NTA is a new system of accounts that is consistent with National Income and Product Accounts but provides much-needed age data. The results also make use of a similar simulation model to assess the implications of population change for wealth and income. Our results show that increasing pensionable age or delaying retirement has a substantial impact on labor income and pension wealth to elderly. An increase in pensionable age raises the asset to labor income ratio, but delaying retirement lowers it. The effects vary a lot depending on our study countries, but the combined effect generally raises the ratio. The effect will be greater if delaying retirement crowds out some of the familial transfers.