Dedry, AntoineOnder, HarunPestieau, Pierre2015-11-042015-11-042015-09https://hdl.handle.net/10986/22840This paper analyzes the impact of aging on capital accumulation and welfare in a country with a sizable unfunded social security system. Using a two-period overlapping generation model with endogenous retirement decisions, the paper shows that the type of aging and the type of unfunded social security system are important in understanding this impact. The analysis compares two types of demographic changes, declining fertility and increasing longevity; three types of pensions, defined contributions, defined benefits, and defined annuities; as well as mandatory and optimal retirement systems to investigate the differences in implications of aging.en-USCC BY 3.0 IGODEFINED CONTRIBUTIONSCAPITAL MARKETSECONOMIC GROWTHPRODUCTIONCAPITAL ACCUMULATIONUNFUNDED PENSIONSOLD AGERETIREMENTMORTALITY DECLINEINCOMEINTERESTCAPITAL ACCUMULATIONSMANDATORY RETIREMENTPENSION SYSTEMSEXCHANGEEQUILIBRIUM VALUEUTILITY MAXIMIZATIONINCOME GROUPLABOR FORCEPENSION CONTRIBUTIONDEVELOPING COUNTRIESDEMOGRAPHIC FACTORSWELFAREECONOMIC IMPLICATIONSEFFECTSINCENTIVESEQUILIBRIUMPOLICY DISCUSSIONSRETIREMENT SYSTEMFACTORS OF PRODUCTIONMARGINAL PRODUCTIVITYCAPITAL STOCKTAXLABOR FORCE PARTICIPATIONPENSION SYSTEMREAL WAGESWEALTHSAVINGEARLY RETIREMENTOLD-AGEPENSIONRETIREMENT AGESLIFE EXPECTANCYLABOR MARKETSAVINGSRATE OF POPULATION GROWTHDEVELOPMENT ECONOMICSPOPULATION GROWTHFERTILITY RATESINCOME INEQUALITYBABYRETIREMENT AGEPRODUCTIVITYMIGRATIONCRITERIAMARKETSOVERLAPPING GENERATIONS MODELORGANIZATIONSSOCIAL SECURITYECONOMICS LITERATUREDEPENDENCY RATIOLABORUTILITYMORTALITYSTATIC EQUILIBRIUMELDERLYTAXESRESPECTPROGRESSDEFINED BENEFITDEMOGRAPHIC TRANSITIONCONSUMPTIONHUMAN CAPITALYOUNG AGESOCIAL SECURITY SYSTEMSCAPITALWAGESPOLICIESANNUITIESFUTUREPOLICY RESEARCH WORKING PAPERVALUEPENSIONSCONTRIBUTION RATEMACROECONOMICSDEMOGRAPHIC CHANGEENVIRONMENTAL CONCERNSUTILITY FUNCTIONSHARE OF CAPITALSHARESEQUILIBRIUM VALUESELDERLY PEOPLEECONOMICSPOLICYPRODUCTION FUNCTIONOUTPUTMANAGEMENTFUNCTIONAL FORMSDEMOGRAPHIC CHANGESTHEORYCONTRIBUTION SYSTEMSECURITYWARSANNUITYINVESTMENTWORLD POPULATIONSHARENUMBER OF CHILDRENLOWER FERTILITYFUNDED PENSIONSPOPULATIONSOCIAL SECURITY SYSTEMRETIREMENT DECISIONSPENSION COVERAGEPOLICY RESEARCHFERTILITYDEMOGRAPHICHEALTHY LIFECAPITAL INVESTMENTRETIREMENT INCENTIVESOUTCOMESDECLINE IN FERTILITYRETIREMENT SYSTEMSDEFINED BENEFITSLEVEL OF FERTILITYDEVELOPMENT POLICYBOOM GENERATIONSFUTURE RESEARCHWorking PaperWorld Bank10.1596/1813-9450-7418