Abstract
Academic and political debates across the globe have greatly voiced the
challenge of undefined costs resulting from the defined-benefit pension system.
The most important cause, which resulted in the cash crunch of defined-benefit
pension payments, stemmed from the rise in the old-age dependency ratio and
increase in the average life expectancy. According to United Nations population
projections (2015), in Pakistan, the old-age dependency ratio [i.e., 61+/20-60] is
expected to lift from 12.6 percent to 21.7 percent of the total population by
2050. The life expectancy, which is expected years of life at birth given current
death rates, has also been lifted from 54 in 1970 to 66 in 2015. These changes in
population structures will have far-reaching economic and social implications
and is very alarming. Although, in Pakistan, population ageing is still at its
nascent stage, but will result in many challenges ahead. The results of current
study also confirm that there is long-run as well as short-run association of both
government pension expenditures and general provident funds with increase in
average life expectancy, old-age dependency ratio and total population of the
country. Therefore, the intended incremental contributions of the study for
policy makers are very much clear based on the results presented
Muhammad Wahab, Owais Mufti, Muhammad Aamir Khan. (2017) The Effects of Population Ageing on the Public Pension System in Pakistan, Abasyn Journal of Social Sciences, Volume-10, Issue-2.
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