Title:	Old-Age Provision and Homeownership – Fiscal Incentives and Other Public Policy Options
Authors:	Martina Eckardt Jörg Dötsch Stefan Okruch
Keywords:	Old-Age Provision
Issue Date:	2018
Publisher:	Springer
Description:	As is well known, demographic change is underway in all EU Member States, although to different degrees. By 2030, Europeans will have the highest median age of 45 years, compared to 40 years for the United States and 21 years for Africa (EU COM 2017a, p. 14, graphic). Following the EU Commission, “(a)ll this will have an impact on the financial sustainability of our welfare systems and in turn on the countries’ fiscal situation. For the EU-27, associated expenditure related to pensions can be expected to rise to 12.4% of GDP by 2030, 7.7% of GDP for healthcare costs and up to 2.4% of GDP for long-term care” (EU COM 2017a, p. 15). As a result, benefits from public pension systems and old-age income will decrease, though the significance of this has not been fully absorbed by the wider community. The Member States have already introduced a number of reforms to ensure fiscal sustainability, such as increasing the overall retirement age, setting incentives for higher employment rates for women as well as decreasing incentives for early retirement. Additional reforms may lead to a lower replacement rate of public pensions (Carone et al. 2016; Eatock 2015; EU COM 2015).1 To counter negative effects on old-age income, policy reforms aim at increasing the share of other sources such as voluntary personal pensions and private homeownership. Investing in personal pensions and in private homeownership are the two main investment decisions consumers make over their life cycle. Both have profound implications for old-age arrangements available to an individual and thus play an important role in their savings motives (Le Blanc et al. 2016). Investing in personal pension assets generates a stream of income after retirement, which supplements statutory and/or occupational pensions. Investing in homeownership not only gen- erates a stream of in-kind services (housing services) from this durable consumer good but also establishes wealth which could be liquidated in old age if needed.
URI:	http://10.6.20.12:80/handle/123456789/55608
ISBN:	978-3-319-75211-2
Appears in Collections:	Population Studies

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