Pensions and Distribution in an Ageing Society: a Non-conventional View

In this paper I shall use a Classical-Keynesian approach to explore the sustainability of an ageing society and of PAYG within it. I begin in section 8.1 by presenting some demographic scenarios that put ageing in the context of the possible evolution of human population, also allow it to be considered in a different, more positive, perspective. This evolution can indeed be interpreted as the result of the world population approaching a stabilisation phase. Migration flows appear not to be able to reverse the ageing process. We shall then assess the impact of the demographic developments on the level of the working-age population, which is the potential labour supply, and on the proportion of old-age population over the population in working-age. The economic impact of ageing, however, cannot be assessed by mere demographic ratios and we must move from population to political economy. Section 8.2 is thus mainly devoted to discussing the impact of the demographic development on the labour market. Section 8.3 explores the financial versus the real sustainability of PAYG viewed through the lens of the alter-native economic theories.