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At Moody’s we spend a great deal of time studying the issue of pension burdens for countries around the world.

To prepare for the upcoming demographic transition, most countries have been trying to improve their fundamental fiscal position to at least accommodate some of the cost increases in future pension claims. Therefore, it is not surprising to see that most developed countries have tried to reign in their public sector debt, with varying degrees of success. Despite the numbers noted above, which capture net present values, there are different trajectories for the implied debt build-up among the various countries depending upon the individual country’s demographics. For instance, almost all developed countries have very low birth rates. What usually distinguishes one country from another demographically is the rate of immigration. Those countries with significant immigration have a longer time horizon over which to deal with the debt burden. Countries with traditionally low levels of immigration, for instance Italy and Japan, will simply age more rapidly than most of the other major developed countries.