Pension systems (un)sustainability and fiscal constraints: a comparative analysis

Heer, Burkhard, Polito, Vito and Wickens, Michael R. ORCID: https://orcid.org/0000-0002-6862-0674 2026. Pension systems (un)sustainability and fiscal constraints: a comparative analysis. Oxford Bulletin of Economics and Statistics 10.1111/obes.70093

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Abstract

Using an overlapping generations model, two new indicators of public pension system sustainability are proposed: the pension space, which measures the capacity to pay for pension expenditures out of labour taxation, and the pension space exhaustion probability reflecting demographic uncertainties. These measures reveal that the pension spaces of advanced economies are strikingly different. Most nations have little scope to further finance pensions out of labour income taxation over the next 30 years. There is no one‐size‐fits‐all solution. Risk‐equivalent pension reforms enhance welfare in the long run, particularly for rapidly ageing nations, but also entail non‐negligible transitional costs.

Item Type:	Article
Date Type:	Published Online
Status:	In Press
Schools:	Schools > Business (Including Economics)
Additional Information:	License information from Publisher: LICENSE 1: URL: http://creativecommons.org/licenses/by/4.0/
Publisher:	Wiley
ISSN:	0305-9049
Date of First Compliant Deposit:	28 May 2026
Date of Acceptance:	26 April 2026
Last Modified:	28 May 2026 09:15
URI:	https://orca.cardiff.ac.uk/id/eprint/187249

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