Increasing PAYG pension benefits and reducing contribution rates
AbstractWe analyse how a reduced contribution rate affects the balanced pay-as-you-go pension budget in the basic overlapping generations model of neoclassical growth (Diamond, P., 1965. National debt in a neoclassical growth model. American Economic Review 55 (5), 1126-1150). It is shown that PAYG pensions can be increased by reducing the payroll tax paid by the young contributors.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 107 (2010)
Issue (Month): 2 (May)
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Web page: http://www.elsevier.com/locate/ecolet
PAYG pension OLG model;
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