Macroeconomic Effects of Pension Reforms in the Context of Ageing Populations: Overlapping Generations Model Simulations for Tunisia

We have developed a general equilibrium overlapping generations’ model to evaluate the effects of demographic transition in Tunisia and to discuss the impacts of pension reforms. Simulations consider two scenarios: a benchmark scenario (without reforms) and a policy change scenario including a set of pension reforms: contribution rate increase, pensions’ level reduction, rise of the retirement age and finally the introduction of a complementary fully funded system. The latter incorporates a specific hypothesis consisting in differentiated returns for free saving (private) and compulsory (pension funds). Simulation results indicate that population ageing could have a major impact on saving rate, factors prices, and economic growth. However, they also inform that policy reforms could reduce negative effects.