Tarmo Valkonen

All practical evaluations of fiscal sustainability that include the effects of population ageing must utilize demographic forecasts. It is well known that such forecasts are uncertain, and that has been taken into account in some studies by using stochastic population projections jointly with economic models. We develop this approach further by introducing regular demographic forecast

This study analyses financial sustainability of the Finnish public sector. Current tax rates are unlikely to yield sufficient tax revenue for financing public expenditure under an ageing population. The estimate of the sustainability gap is 2œ per cent of GDP, for the period 2010 – 2060. The estimate is based on the 2009 population projection

The earnings-related pension system is partially pre-funded in Finland and has currently large reserves. This has roused debate whether the pension funds should take a more active role in promoting employment, growth and domestic ownership of the firms. We analyse the justifications presented for and against overweighting domestic investments in the portfolios of the pension

We study old age care expenditures and means to prepare for them. The expected size of the expenditures is described both from the point of view of individuals and the municipalities who provide the services. We use a numerical stochastic life cycle model to research how much various individuals would benefit from a possibility to

In this study, we review the connection between individuals’ private wealth and their timing of the retirement. The study begins with a review of related international literature. In the second section, we describe how Finnish citizens have responded when asked about the impact of their wealth on the timing of their retirement. In the third

We study the extent to which retired households in Finland could supplement their mandatory pension benefits by releasing their equity. We also consider the tax treatment of different financial products that turn wealth into an income stream. In addition, we use a life cycle consumption-savings model to study which kind of households’ in Finland would