Editing Pension (section)

==== Increase of the retirement age ====
This pension reform channel involves an increase of the [[retirement age]]. To do so, it implies an increase in the working age of for instance 2%, which decreases the number of retirees. In order to find this precise number for the simulation, we can assume people live on average 80 years, study during 20 years and are retirees during 20 years. As a consequence, an increase of 2% for life expectancy at work amounts to a decrease of 4% for life expectancy in retirement. Real pensions make globally a certain percentage of the GDP according to the country chosen. By knowing it, you can finally find the certain number of GDP point to simulate the decrease of number of retirees. For instance, in France real pensions make globally around 15% of GDP. Finally, -4% of 15% makes a decrease of 0.6 of GDP point.

In the short term, this labour force shock (supply policy) leads to an increase of unemployment which negatively affects household's purchasing power. The consumption decreases along with demand in general which leads to a decrease of activity. However, the [[Current account (balance of payments)|current account]] is improved as imports are reduced with the drop of domestic demand. In the medium term, through the rise of unemployment, gross salary and the real labour cost progressively decreases. It results in the progressive increase of employment and thus the gradual decrease of unemployment. The household's consumption prices decrease: this shock is [[deflation]]ary. The competitivity is improved which lead to a job creation and the boost of economic activity. The GDP increases and this shock is therefore expansionist. Administration's financing capacity improved in the short term happens to be limited in the medium term. Indeed, the drop of prices decreases the tax bases, especially household income.<ref name=":0" /> 

High [[Dependency ratio#Old-age dependency ratio|old-age dependency ratio]]s lead to forecasts of retirement ages of up to 70 years.<ref name="i599"/>