Pensions and ageing in a globalizing world : international spillover effects via trade and factor mobility

The main conclusions of the thesis are that pension reform can be welfare improving if losses and benefits are redistributed by the central government. The possibility of welfare improving social security reform comes from a more efficient use of an immobile production factor, such as land. Furthermore, the reforming country has incentives not to announce the pension reform in advance; however, such an announcement would be appreciated by its neighbours. Population ageing may lead to an inflow or outflow of capital from the ageing country depending on the degree of substitutability between domestic and foreign. Because of differences in pension systems, population ageing may lead countries to specialze in labour intensive goods, which is contrary to what many previous studies have found.