EXPLORING PENSION FUND DEVELOPMENT THROUGH MACRO-FINANCIAL INTERACTIONS IN DIVERSE AGEING ECONOMIES

Abstract

This study investigates the impact of macro-financial variables—such as dependency ratio, replacement rate, average salary, working wages, and other key macroeconomic factors—on pension fund development. It compares the effects of these factors across aging and younger OECD countries, providing insights into the macroeconomic dynamics that underpin the substantial asset holdings of OECD pension funds. A dynamic panel data model was employed to assess the individual significance of each variable, with R²-change analysis used to identify the primary macroeconomic drivers of pension fund growth. Findings indicate that average age, working wages, personal income tax, and inflation positively influence pension fund growth in aging economies, while exhibiting negative effects in younger economies, depending on the growth perspective. By integrating a literature review of multiple economies, the study highlights key determinants of pension fund performance and offers valuable guidance for policymakers and analysts in OECD countries seeking to optimize pension fund management.