The paper considers a quite realistic overlapping-generations model of an economy, where the population is aging due to a falling number of births and a rising life expectancy. One form of old-age income is the unfunded pension system, while private savings and bequests are another. Members of subsequent cohorts determine their consumption paths by maximizing their lifetime utility functions. Filling the model with numbers makes it possible to compare different pension policies: 1. the basic run, 2. reduced accrual rates, 3. replacement of wage indexation with price indexation, and 4. a raised retirement age. Whether the policy changes are anticipated or not, the private reactions differ widely.
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