In parallel to the aging of the general population, the workforce in the euro area is also growing older. This could cause productivity growth to decline in the years ahead, raising another policy challenge for governments already dealing with legacies from the crisis such as high unemployment and debt. […]
Indiana Jones, the fictional character of the namesake movies, once said “It’s not the years, it’s the mileage.” The quote comes to mind as many advanced economies wrestle with the best way for pension reform to ensure both retirees and governments don’t go broke. Our view, explained in a new study, is that in fact the years do matter. Our analysis shows that gradually raising retirement ages could help countries contain pension spending increases and boost economic growth.