Can the Eastern Caribbean Currency Union Afford to Grow Old?

March 1, 2009

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Format: Chicago

Hunter K Monroe. Can the Eastern Caribbean Currency Union Afford to Grow Old?, (USA: International Monetary Fund, 2009) accessed December 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The demographic transition in the Eastern Caribbean Currency Union (ECCU) now underway is rapid compared with international experience, and emigration is playing a particularly large role. This paper describes and quantifies several factors which could magnify the challenge of pension reform. First, for some ECCU countries, continued emigration at historical rates would considerably advance the projected date at which pension scheme assets are depleted. Second, there is a significant risk that assets will underperform, given the large exposures to the highly-leveraged public sector and to a lesser extent the record with private sector investments. Third, portfolio diversification away from the public sector could be complicated by age-related pressure for greater central government health spending.

Subject: Economic sectors, Expenditure, Health care spending, Labor, Migration, Pension spending, Pensions, Population and demographics, Public sector

Keywords: Caribbean, ECCU emigration rate, ECCU member, ECCU pension reform, ECCU pension schemes, Health care spending, Migration, OECD census data, Pension spending, Pension systems, Pensions, Public sector, Rate, WP

Publication Details

Pages:

15
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2009/038
Stock No:

WPIEA2009038
ISBN:

9781451871869
ISSN:

1018-5941

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