Population Aging and Long-Term Fiscal Sustainability in Austria
December 1, 2002
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Summary
Austria faces significant population aging. This will increase public spending on pensions, health care, and long-term care, while tax and social security revenues will fall. This paper analyzes the fiscal burden facing Austria due to aging and the policy steps necessary to address it. The paper finds that Austria is not well prepared to meet the fiscal burden of aging and that fiscal sustainability is threatened, even under fairly optimistic assumptions about the effects of recent pension and labor market reforms. Consequently, to ensure long-term sustainability, pension reform must go further and other saving measures might also be necessary.
Subject: Aging, Expenditure, Health care spending, Labor, Pension spending, Pensions, Population and demographics, Retirement
Keywords: Aging, benefit effect, budget constraint, debt ratio, debt ratio target, early retirement, Fiscal Policy, Health Care, Health care spending, Pension spending, Pensions, Population Aging, present discounted value, Public Finance Sustainability, Retirement, retirement age, spending pressure, welfare system, WP
Pages:
24
Volume:
2002
DOI:
Issue:
216
Series:
Working Paper No. 2002/216
Stock No:
WPIEA2162002
ISBN:
9781451875096
ISSN:
1018-5941
