Demographic decline in many Organization for Economic Co-operation and Development (OECD) countries is widely considered the principal source of hurling public pension disbursements, whilst trade unions are often blamed for staunch antagonism towards any transformations that might alleviate the fiscal encumbrance. If financialization is state-acquiesced, with the state being considered fundamental for market integration and social regulation of markets to protect against market failures, how then should inter-generational equity be addressed? This work tests the hypothesis that deindustrialization (measured as the declining proportion of employment in manufacturing) and lower trade-union density are quintessential channels through which demographic change translates into ascending pension outlays. Using OECD data from 1960 to 2013, we utilize longitudinal and panel quantile statistical methods to dissect these links across assorted pension system clusters (total, mandatory private, mandatory public, mandatory public & voluntary, and mandatory public & private). This study highlights the mediating role of labor market structure in pension financing.
Apergis et al. (Fri,) studied this question.