The future of public pensions in the OECD

Demographic changes are often presumed to put the future of public pensions in jeopardy. However, public pension finances should be sensitive to employment, wage and inequality growth. A few macroeconomic simulations show that, given modest assumptions about long-term employment and wage growth, the selected OECD countries could continue to pay for public pensions. In particular, policies that can help to improve employment growth could be useful everywhere. Obstacles to public pensions are more likely to arise from political developments than from economic trends.