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The International Spillover Effects of Pension Reform

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  • Yvonne Adema
  • Lex Meijdam
  • Harrie A. A Verbon

Abstract

This paper explores how pension reforms in countries with PAYG schemes affect countries with funded systems. We use a two-country two-period overlapping-generations model, where the countries only differ in their pension systems. We distinguish between the case where a reform potentially leads to a Pareto improvement in the PAYG country, and where this is impossible. In the latter case the funded country shares both in the costs and the benefits of the reform. However, if a Pareto-improving pension reform is feasible in the PAYG country, a Pareto improvement in the funded country is not guaranteed.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1540.

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Date of creation: 2005
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Handle: RePEc:ces:ceswps:_1540

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Keywords: international spillover effects; pension reform;

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References

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  1. Axel Boersch-Supan & Alexander Ludwig, 2005. "Aging, pension reform, and capital flows: A multi-country simulation model," Computing in Economics and Finance 2005, Society for Computational Economics 123, Society for Computational Economics.
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  3. Gale, David, 1973. "Pure exchange equilibrium of dynamic economic models," Journal of Economic Theory, Elsevier, Elsevier, vol. 6(1), pages 12-36, February.
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  5. CASAMATTA, Georges & CREMER, Helmuth & PESTIEAU, Pierre, 1999. "The political economy of social security," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 1999055, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  6. Brunner, Johann K., 1996. "Transition from a pay-as-you-go to a fully funded pension system: The case of differing individuals and intragenerational fairness," Journal of Public Economics, Elsevier, Elsevier, vol. 60(1), pages 131-146, April.
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  20. PESTIEAU, Pierre & PIASER, Gwanaël & SATO, Motohiro, . "PAYG pension systems with capital mobility," CORE Discussion Papers RP, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) -1869, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  21. Breyer, Friedrich & Straub, Martin, 1991. "Welfare effects of unfunded pension systems when labor supply is endogenous," Discussion Papers, Series 1, University of Konstanz, Department of Economics 252, University of Konstanz, Department of Economics.
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Citations

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Cited by:
  1. Kai A. Konrad & Stergios Skaperdas, 2005. "The Market for Protection and the Origin of the State," CESifo Working Paper Series, CESifo Group Munich 1578, CESifo Group Munich.
  2. ARTIGE, Lionel & DEDRY, Antoine & PESTIEAU, Pierre, 2013. "Social security and economic integration," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2013037, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Fedotenkov, I., 2012. "Pensions and ageing in a globalizing world. International spillover effects via trade and factor mobility," Open Access publications from Tilburg University, Tilburg University urn:nbn:nl:ui:12-5590843, Tilburg University.
  4. Pierre Pestieau & Gwanaël Piaser & Motohiro Sato, 2006. "PAYG pension systems with capital mobility," International Tax and Public Finance, Springer, Springer, vol. 13(5), pages 587-599, September.
  5. Igor Fedotenkov & Lex Meijdam, 2013. "Crisis and Pension System Design in the EU: International Spillover Effects Via Factor Mobility and Trade," De Economist, Springer, Springer, vol. 161(2), pages 175-197, June.

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