Pay-as-you-go pensions and entitlements

The future of Pay-as-you-go (PAYG) pension systems is a hotly debated issue. In this paper, we argue that the real difficulty facing these systems does not come from factors such as aging or declining productivity growth but from political resistance to changes. In other words, the problems are political rather than economic or demographic. Our society can afford to grow older but to do so, it is necessary to question and eventually abandon a number of entitlements and continuously adjust the pension system to evolving needs.