This paper utilises a model with overlapping generations ad modum Blanchard-Yaari and shows that by broadening the labour supply on the extensive margin through longevity adjustment of the statutory retirement age, labour supply is likely to decrease on the intensive margin. This backlash effect depends strongly on the specific design of the pension system: It is significantly higher under a pay-as-you-go scheme with fixed benefits compared to a pay-as-you-go scheme with fixed contributions and a fully funded scheme based on voluntary savings. The findings have implications for how to address the fiscal and macroeconomic challenges raised by an ageing population.
JEL codes: E21, J21, J26, H55