Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
This paper empirically investigates the role of pension systems in driving current account balances. We construct three indicators—a system’s type of funding, generosity, and coverage—to measure pension systems. Using a panel of 49 countries that spans over 30 years, we find that the presence of a fully-funded system is associated with a higher current account balance. Further, we find that this effect increases with the system’s generosity and coverage. In contrast, we find no significant correlation between pay-as-you-go systems and current account balances. By accounting for pension indicators, we are able to explain a significant share of the increase in current account surpluses in advanced economies over the past two decades.