Macroeconomic effects of pension reforms in the context of ageing populations : overlapping generations model simulations for Tunisia

Abstract EN

We have developed a general equilibrium overlapping generations’ model to evaluate the effects of demographic transition in Tunisia and to discuss the impacts of pension reforms. Simulations consider two scenarios: a benchmark scenario (without reforms) and a policy change scenario including a set of pension reforms: contribution rate increase, pensions’ level reduction, rises of the retirement age and finally the introduction of a complementary fully funded system.

The latter incorporates a specific hypothesis consisting in differentiated returns for free saving (private) and compulsory (pension funds).

Simulation results indicate that population ageing could have a major impact on saving rate, factors prices, and economic growth.

However, they also inform that policy reforms could reduce negative effects.