How to think about public pensions

At a time when France is implementing a far-reaching reform of its public pension system, we examine how to think about public pensions. We do not look at the technical details, which are numerous and important. Rather, we examine the macroeconomic implications of the choice of the nature of the public pension system: The pension share of GDP and, accordingly, the tax burden and competitiveness; Given demographics, the trade-off between the level of pensions and the retirement age, and its effects on the savings rate, the accumulation of productive capital, the labour force and the size of potential GDP.