Around the world, pay-as-you-go government public pension systems are running up against the hard-edged reality of demographics. According to the World Bank, by 2030, 25 percent of the population in most of the world’s leading economies will be over 65 years old. The trend is most pronounced in the industrialized countries of Europe, the United States, and Japan, where the percentage of the elderly will double, so that almost one-third of their citizens will be aged 65 or older. But developing countries are experiencing similar strains.

Worldwide, lower birthrates and increased life expectancy are reducing the ratio of workers to retirees. To compensate for this demographic squeeze and to sustain public pension systems, governments will be forced to dramatically increase taxes, sharply reduce benefits, or both. In the United States alone the Social Security program’s trustees estimate the payroll tax will have to be increased by as much as 50 percent.

However, out of this crisis new and innovative alternatives have developed, as countries around the world experiment with different forms of privatization. Recognizing the revolution in privatization, the Cato Institute and The Economist first hosted “Solving the Global Public Pensions Crisis,” held in London in December 1997. Delegates from 38 countries attended.

Since that time, more countries have opted for private, individually based pension programs, including several of the post-Communist Eastern European nations. Following the success of the first conference, the Cato Institute and The Economist will cosponsor “Solving the Global Public Pensions Crisis II: The Privatization Revolution,” to be held at the Roosevelt Hotel in New York on March 9–10, 2000.

The conference participants will evaluate the experiences of countries that have privatized government pension plans, examine more recent moves toward privatization, and look at issues for the future in both the United States and abroad.