This interactive document is offering facilities to study the
effects of changing the retirement age. You can only use the interactive
facilities if Microsoft Excel 5.0 is installed on your computer.
The key number for judging the financiability of a retirement payment system is the
ratio of number of retired people and the number of people in the workforce.
Our model, however, will not use this number. Instead, we will use
the age group ratio, i.e. the number of people in retirement age divided
by the number of people in "workforce age".
The basic data of our model is age group data of the population of Austria
according to the census of 1991. These data give us the numbers of people of age 20,
21, ... in 1991.
Assuming that workforce entrance age is 20 and average retirement entrance age is 58
we get the number of people in the workforce by adding the numbers of people aged
20 up to 57. By adding the numbers of people aged 58 and more we get the number
of people in retirement age.
This model is, however, simplistic because of the following reasons:
Therefore, our model allows to change the values of key parameters of
the system. You may change workforce entrance age, retirement age, and
percentage of population part of the retirement financing system
separately for male and female population. You can do so by either
entering varying values with the keyboard or by using the sliders.
The percentage of population in the workforce used in our model is not
the same number as used in official publications. Our percentage is
calculated with respect to the population in workforce age (e.g.
population aged 20 to 57), in official publications the percentage is
calculated with respect to the total population including children and
The result of our model calculations are presented as a table and a graph of the age
group ratio for the years 1991 until 2025. The table and the graph will allow you to
compare the scenarios you created by changing the model parameters with the values
derived from the actual current parameters (i.e. workforce entrance age, retirement
age, and percentage of people in the system).
The basic data for estimation the future age group structure come from the official life
expectancy table published by the Austrian Bureau of Census (Österreichisches
Statistisches Zentralamt). This table gives age specific mortality rates. Thereby it
allows, e.g., to calculate the number of people age 21 in the year 1992 based on the
number of people age 20 in 1991. Using these data, and starting from the census of
1991, we can calculate reasonable predictions for the age distribution of the
population in the future. From these data, we also can calculate future values of the
age group ratio.
The program (i.e. the worksheet with graphs) you can download now to
your computer needs Microsoft Excel 5.0)
To use the model in a convenient way you have to tell you Web browser
(e.g. Netscape) that Excel should be started automatically with this
worksheet. This is rather easy with the latest versions of Netscape.
When you click the link connecting you to the worksheet, the Netscape
will tell you that now Viewer/Helper Application has been configured
Then you have to click the button Configure a
Viewer. On the next screen you have to tell Netscape how Excel
is started on your system. To do this you can either type in the
command line for starting Excel, e.g.
or you can use the Browse button and dialog box to search for Excel on
your hard disk anmd configure it that way.
Then Netscape will start Excel and immediately will load or model.
Our model does not claim to be complete or perfectly accurate. It does not take into
account, for example, migration. It is intended to show in which direction and
approximately by what amount changes in retirement age will influence the age group
ratio. Another simplification contained in our model is the assumption that the
percentage of population entitled retirement payments with regard to people in
retirement age is considered to be equal with the percentage of people in the
workforce with regard to people in workforce age. As a consequence of this
assumption the model ignores the possibility that, due to changing social circumstances
and improved education opportunities for females, the percentage of working females
with respect to females in workforce age might be higher the percentage of females
entitled to receive retirement payment with respect to females in retirement age.
Additionally, to be realistic, our model also needs the birth numbers for the years 1992
to 2025. Since these numbers (naturally) are not available yet, the model uses the birth
numbers from 1991 for all the following years.
You can now download the model
and start the analysis.
The starting values for the parameters
you will see when the model appears represent the
current values in Austria.
Special thanks to Dr. Gerhard Majce for important suggestions for
improving the model. These suggestions already have been incorporated
into the program.