Nav­ig­at­ing Pen­sion Sys­tems in an Aging World: Les­sons from Den­mark

Course content

The Danish pension system is often ranked as one of the best pension systems in the world. An essential part of the Danish welfare state, it generates high living standards in retirement and mitigates old-age poverty. At the same time, it is financially sustainable and responds powerfully to the challenges posed by demographic aging – at a time where pension systems in many other countries are coming under pressure. While the system also has its weaknesses, e.g. relating to pension fund regulation and governance, it serves as a blueprint for reforming pension systems in other countries.

This course is an introductory course to the economics of pensions. We will use the Danish example to study what makes for a good pension system, and develop policy recommendations for pension systems in other countries.

We will start by studying pension systems from a theoretical perspective. We will focus on two prototype pension systems – pay-as-you-go pensions and funded pensions –, understand how they work and identify their strengths and weaknesses. We will also study how each responds to demographic aging.

In the second part of the course, we will study how pension systems work in the real world. We will get familiar with the key features of the Danish pension system, learn about its history and cast a glance into its future. Building on the Danish case, we will then consider the pension systems of other countries and derive concrete suggestions for making these pension systems more sustainable.