Influence of Capital Markets, Inflation, and Demographics on the Growth of Pension Fund Assets in the State Organization of Islamic Cooperation

Abstract

The percentage of pension receipts that is still low is experienced by many developing countries in the continent of Asia and Africa in terms of providing pension funds for their citizens. This study seeks to analyze the effect of growth in pension fund assets in OIC member countries. The measurement of the growth of pension fund assets is viewed through the aspects of the number of stock traded, the equity index, the inflation rate, male labor force participation, female labor force participation, the working age, and the retirement age. In addition, this study uses a panel data regression analysis method with the period 2010 to 2019. The results show that there are variables of male labor force participation, female labor force participation, working-age, and retirement age that have a significant effect. Male labor force participation, working-age, and retirement age have a positive effect on the growth of pension fund assets, while female labor force participation has a negative effect on pension fund assets. It can be said that the demographic aspects can influence the growth of pension fund assets in OIC member countries in the period 2010 to 2019.

Pension Assets Investments in the Nigerian Economy

“…In addition, these investments experiences higher unrealized losses and lower return [8]. This finding is in line with [39,40] that pension fund investment may not necessarily increase the standard of living of citizens.…”

“…Using 13 European countries from period 1999 -2014, and the Panel regression approach; the findings show that the long term characteristics of pension funds have no significant link with European markets efficiency. In another development, Ashari et al, [40] utilized a panel approach from 2010 -2019 in OIC member countries and found slower growth due to existing demographic measures. Specifically, working and retired female participation in pension fund present negative effect on pension investments.…”