Article;
http://economictimes.indiatimes.com/opinion/policy/how-to-fix-the-pension-system/articleshow/8579503.cms
Comment;
The burden of pension and raising retirement age in America and Europe is understandable. Their population is aging with very low mortality rates which necessitates that their population work longer hours than their Indian and other emerging nation's counterparts to sustain their consumption. Another notable feature of the aging economies is their low birth rates. By the way, birth rate minus mortality rate gives you actual growth rate of population. Therefore, the overall growth rate of population in European and American nation is decreasing. The economic effects of these exogenous changes is also worth noting. Low birth rate also means that lower number of people will be added to their workforce and therefore will generate less income and pension funds and therefore they need old people to work more in order to generate more income and pension funds. While longevity will increase the burden on pension funds. But the overall burden on pension funds will be decided by how many people join their workforce and how many retire in the same period. The replacement of old by the young population should be enough to generate more income and pension in order to sustain consumption and growth rate of these economies. Moreover, they need to incentivize high birth rate in-order to reduce the burden of an aging population in the years to come. As far as, the growth rate of population in emerging countries is concerned they are also facing burden but of an unemployed workforce.
http://economictimes.indiatimes.com/opinion/policy/how-to-fix-the-pension-system/articleshow/8579503.cms
Comment;
The burden of pension and raising retirement age in America and Europe is understandable. Their population is aging with very low mortality rates which necessitates that their population work longer hours than their Indian and other emerging nation's counterparts to sustain their consumption. Another notable feature of the aging economies is their low birth rates. By the way, birth rate minus mortality rate gives you actual growth rate of population. Therefore, the overall growth rate of population in European and American nation is decreasing. The economic effects of these exogenous changes is also worth noting. Low birth rate also means that lower number of people will be added to their workforce and therefore will generate less income and pension funds and therefore they need old people to work more in order to generate more income and pension funds. While longevity will increase the burden on pension funds. But the overall burden on pension funds will be decided by how many people join their workforce and how many retire in the same period. The replacement of old by the young population should be enough to generate more income and pension in order to sustain consumption and growth rate of these economies. Moreover, they need to incentivize high birth rate in-order to reduce the burden of an aging population in the years to come. As far as, the growth rate of population in emerging countries is concerned they are also facing burden but of an unemployed workforce.
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