This policy-oriented book identifies the issues countries should consider as they reevaluate their old income security policies and formulate new methods. The choice between the various models for providing old-age security has broad implications for the operation of labor and capital markets, the fiscal system, and the level, growth, and distribution of GNP. The author concludes that a mixed strategy is more effective than any single method of income security. This will be an important book for international economists and policymakers.

Analyzes the issues affecting income security for the elderly in both developing and industrial nations.

Systems providing financial security for the old are under increasing strain throughout the world. Changing demographics have led to an increased proportion of old people in the general population. Traditional means of support for the old, such as extended families, are weakening. Meanwhile, formal systems, such as government-backed pensions, have proven unstable.

For these reasons economists, policymakers, and government officials are exploring ways to address such issues as:

• How to ensure financial security for the old and the best ways of paying for such security
• The roles of the public and private sectors when systems are used to enhance rather than detract from economic growth.

This study, the first comprehensive and global examination of old age security, addresses such issues. It identifies three functions of old age financial security programs--redistribution, saving, and insurance. It evaluates the policy options for meeting these functions using two criteria: their impact on the aged and their impact on the economy as a whole.

The study suggests that financial security for the old and economic growth would be better served if governments relied on three systems:
1) A publicly managed system with mandatory participation and the limited goal of reducing poverty among the old
2) A privately managed mandatory savings system
3) A voluntary savings system.

These three systems would ensure against the many risks of old age.

The study concludes that a combination of different income security policies is more effective than any single approach and that all countries should begin planning for their aging populations now.

A Copublication of the World Bank and Oxford University Press.

Download Averting the Old Age Crisis: Policies to Protect the Old and Promote Growth

PDF format, 21MB, 436Pages.

"This is a comprehensive examination of pension schemes across the world, and is the outcome of extensive research by a team from the World Bank. It should be read by anyone who plans to retire within the next 50 years."--Journal of Public Health Medecine

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OVERVIEW
AS WE GROW OLD WE WORK. PRODUCE, AND EARN less, and thereforen eeda secures ource of income to see us through life. Societies and governments have developed mechanismiitso provide income security for their older citizens as part of the social safety net for reducing poverty. But these arrangements are a concern for all of us-rich as well as poor, young as well as old-because the arrangements adopted can either help or hinder economic growth.

Today, as the world's population ages, old age security systemsa re in trouble worldwide. Informal community- and family-based arrangements are weakening. And formal programs are beset by escalating costs that require high tax rates and deter private sector growth-while failing to protect the old. At the same time, many developing countries are on the verge of adopting the same programs that have spun out of control in middle- and high-income countries. ...