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Aging and the financing of social security in Switzerland

Swiss Journal of Economics and Statistics volume 147, pages 181–231 (2011)Cite this article

Summary

The gains in life expectancy are expected to double the dependency ratio and increase population by 10% in Switzerland until 2050. To quantify the effects on social security and public finances, we use an overlapping generations model with five margins of labor supply: labor market participation, hours worked, job search, retirement, and on-the-job training. A passive fiscal strategy would be very costly. A comprehensive reform, including an increase in the retirement age to 68 years, may limit the tax increases to 4 percentage points of value added tax and reduce the decline of per capita income to less than 6%.

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Authors and Affiliations

  1. CEPR, CESifo and NetSpar, University of St. Gallen (FGN-HSG), Switzerland

    Christian Keuschnigg &  Mirela Keuschnigg

  2. Swiss Economics, Switzerland

    Christian Jaag

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  1. Christian Keuschnigg
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  2. Mirela Keuschnigg
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  3. Christian Jaag
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Additional information

Financial support by the Swiss State Secretariat for Economic Affairs (SECO) is gratefully acknowledged. We appreciate stimulating comments by SECO economists, seminar participants at the University of St. Gallen and Hannes Berger and Ludwig Strohner. We are particularly grateful for very constructive comments by an anonymous referee and by the editor, Klaus Neusser.

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Keuschnigg, C., Keuschnigg, M. & Jaag, C. Aging and the financing of social security in Switzerland. Swiss J Economics Statistics 147, 181–231 (2011). https://doi.org/10.1007/BF03399345

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