PhD thesis: ‘Costs of aging counteracted by increasing the official retirement age’

Macroeconomists regard the chances of dying as a constant, regardless of age. Ward Romp has developed a model that takes the increased chances of dying as one gets older into account. He used it to analyse the consequences of aging on economic growth and on the pension system.

Romp investigated the role of the demographics of and changes to the population in the division of assets and liabilities over current and future generations. He tried to answer questions such as How can we in a macroeconomics sense take account of the links that exist between different generations? What are the effects of aging on economic growth, retirement age and the pension system? How can we adapt our pension system to limit the costs of aging and what will the effects be on the prosperity of the different generations?

It appears that the pension systems in most Western European countries are still organized in such a way that for a rational individual with an eye to the benefits, the optimum time to retire is the first year that he or she can claim a pension. Increasing the retirement age is thus the best alternative for coping with the costs of aging, concludes Romp.

Curriculum Vitae
Ward Romp (Harderwijk, 1976) studied economics in Groningen. The research was conducted at the SOM research school. He will be awarded his PhD in Economics on 15 February 2007 (4.15 p.m.). His supervisors were Prof. B.J. Heijdra and Prof. J. de Haan. His thesis is entitled Essays on dynamic macroeconomics. The role of demographics and public capital. Romp will be continuing his research, financed by Netspar (Network for Studies on Pensions, Aging and Retirement).