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2022/2023  KAN-CCMVV1915U  Pension Economics

English Title
Pension Economics

Course information

Language English
Course ECTS 7.5 ECTS
Type Elective
Level Full Degree Master
Duration One Semester
Start time of the course Autumn
Timetable Course schedule will be posted at calendar.cbs.dk
Max. participants 80
Study board
Study Board for MSc in Economics and Business Administration
Course coordinator
  • Svend Erik Hougaard Jensen - Department of Economics (ECON)
Main academic disciplines
  • Economics
Teaching methods
  • Blended learning
Last updated on 11-02-2022

Relevant links

Learning objectives
After completing this course, the student should be able to
  • Identify within an overlapping-generations model how different pension schemes affect individual savings and retirement decisions
  • Identify the main mechanisms through which the pension system is challenged by demographic changes and discuss policy options
  • Understand the economics of ageing and intergenerational accounting
  • Analyze issues of distribution, insurance and incentives in relation to the design of pensions
  • Explain the relationship between pension policies and aggregate savings
  • Derive testable predictions on the relationship between changes to the pension system and households’ economic and financial decisions
  • Demonstrate knowledge based on Danish evidence on the relationship between changes to the pension system and households’ economic and financial decisions
  • Demonstrate a solid understanding of the structure of the Danish pension system from a practical perspective, such as types of pension schemes, the role of Danish pension companies, and regulation of the pension sector
  • Evaluate how pension systems affect the structure of the financial system based on cross-country evidence
Course prerequisites
Basic knowledge (BA-level) of microeconomics, macroeconomics and finance
Pension Economics:
Exam ECTS 7,5
Examination form Written sit-in exam on CBS' computers
Individual or group exam Individual exam
Assignment type Written assignment
Duration 4 hours
Grading scale 7-point grading scale
Examiner(s) One internal examiner
Exam period Winter
Aids Limited aids, see the list below:
The student is allowed to bring
  • An approved calculator. Only the models HP10bll+ or Texas BA ll Plus are allowed (both models are non-programmable, financial calculators).
  • Language dictionaries in paper format
The student will have access to
  • Advanced IT application package
Make-up exam/re-exam
Same examination form as the ordinary exam
If the number of registered candidates for the make-up examination/re-take examination warrants that it may most appropriately be held as an oral examination, the programme office will inform the students that the make-up examination/re-take examination will be held as an oral examination instead.
Course content, structure and pedagogical approach

The course offers a broad account of the role of pension systems and policies for individual economic decisions as well as for macroeconomic outcomes including distributional implications. The first part will deal with the Danish pension system from a practical perspective focusing on types of pension schemes, and management of pension schemes seen from the perspective of Danish pension companies. It will give an account of how the pension system has evolved over recent decades and relate to pension systems in other countries on the Western hemisphere. The second part will contain an introduction to the modelling framework – overlapping generations models – for analyzing microeconomic and macroeconomic implications of pension systems and welfare consequences of pension policies. It will focus on individual decisions on consumption, savings, and retirement from a lifecycle perspective as well as on generational accounting. Furthermore, the impact of pensions on macroeconomic balances and performance will be addressed. The third part will give an account of the empirical literature estimating and testing the abovementioned implications of various pension schemes and changes in pension policies. As an integral part of the course outside speakers will be invited to give presentations on selected topics.

Description of the teaching methods
Feedback during the teaching period
We aim to give constant feedback to students in the form of Q and A in the classroom. We encourage students to ask questions and participate in class discussion. The feedback is also provided during office hours.
Student workload
Classes 33 hours
Preparation / exam 170 hours
Expected literature

Andersen, Asger L., Anders Møller Christensen, Sigrid Alexandra Koob, Ri Kaarup, Nick Fabrin Nielsen and Martin Oksbjerg (2012), The wealth and debt of Danish families, Danmarks Nationalbank Monetary Review, 2nd Quarter, part 2.


Bernheim, B. Douglas (2002), Taxation and saving, in: A. J. Auerbach and M. Feldstein, Handbook of Public Economics, edition 1, vol. 3, chapter 18, pp. 1173-1249, Elsevier.


Blake, David (2006), Pension economics, John Wiley and Sons.


Chetty, Raj, John Friedman, Søren Leth-Petersen, Torben Nielsen and Tore Olsen (2014), Active vs. passive decisions and crowd-out in retirement savings accounts: Evidence from Denmark, The Quarterly Journal of Economics, vol. 129, issue 3, pp. 1141-1219.


Madrian, Brigitte C., and Dennis F. Shea (2001), The power of suggestion: Inertia in 401(k) participation and savings behavior, The Quarterly Journal of Economics, vol. 116, issue 4.


OECD (2017), Pensions at a glance, selected parts (50 pages), Paris, available at www.sourceoecd.org.


Scharfstein, David (2018), Pensions policy and the financial system, Journal of Finance, Vol. 73, Issue 4, pp. 1463-1512.


Additional material to be announced at the start of the course.

Last updated on 11-02-2022