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The Value of Children and Immigrants in a Pay-As-You-Go Pension System: A Proposal For a Partial Transition to a Funded System

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Author Info
Sinn, Hans-Werner

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Abstract

It is shown that the net fiscal externality created by an additional member of a pay-as-you-go-pension system that is endowed with individual accounts equals the gross contributions of this member. In Germany, this equals about 175,000 Deutsche marks. The paper uses this information to design a hybrid funded system that avoids this externality and improves the public pension system under equity and efficiency considerations.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1734.

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Date of creation: Nov 1997
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Handle: RePEc:cpr:ceprdp:1734

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Related research
Keywords: Children Immigration Pay-As-You-Go Pension Systems

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Find related papers by JEL classification:
H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Gary S. Becker & Robert J. Barro, 1988. "A Reformulation of the Economic Theory of Fertility," NBER Working Papers 1793, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Martin Feldstein & Jeffrey B. Liebman, 2001. "Social Security," NBER Working Papers 8451, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
    • Feldstein, Martin & Liebman, Jeffrey B., 2002. "Social security," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 32, pages 2245-2324 Elsevier. [Downloadable!] (restricted)
  3. Howitt, Peter & Sinn, Hans-Werner, 1989. "Gradual Reforms of Capital Income Taxation," American Economic Review, American Economic Association, vol. 79(1), pages 106-24, March. [Downloadable!] (restricted)
  4. Holger Bonin & Bernd Raffelhüschen & Jan Walliser, . "Can Immigration Alleviate the Demographic Burden?," EPRU Working Paper Series 99-17, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
  5. Martin Feldstein, 1995. "Would Privatizing Social Security Raise Economic Welfare?," NBER Working Papers 5281, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. Martin Feldstein & Andrew Samwick, 1997. "The Economics of Prefunding Social Security and Medicare Benefits," NBER Working Papers 6055, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Cigno, Alessandro & Rosati, Furio C., 1996. "Jointly determined saving and fertility behaviour: Theory, and estimates for Germany, Italy, UK and USA," European Economic Review, Elsevier, vol. 40(8), pages 1561-1589, November. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Michael Voigtländer, 2005. "Qualitative und quantitative Aspekte einer Elternrente," Otto-Wolff-Institut Discussion Paper Series 02/2005, Otto-Wolff-Institut für Wirtschaftsordnung, Köln, Deutschland. [Downloadable!]
  2. Tim Krieger, 2004. "Public pensions and immigration policy when voters are differently skilled," Public Economics 0411006, EconWPA. [Downloadable!]
  3. Alexander Kemnitz, 2005. "Can Immigrant Employment Alleviate the Demographic Burden? The Role of Union Centralization," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
    Other versions:
  4. Axel Börsch-Supan, 2002. "Mehr Zuwanderung? Zur Rolle des Auslands bei der Stabilisierung der gesetzlichen Rentenversicherung in Deutschland," MEA discussion paper series 02022, Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim. [Downloadable!]
  5. Hans-Werner Sinn, 1998. "The Pay-As-You-Go Pension System as a Fertility Insurance and Enforcement Device," NBER Working Papers 6610, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  6. Volker Meier & Matthias Wrede, 2005. "Pension, Fertility, and Education," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
  7. Hans-Werner Sinn, 2000. "Why a Funded Pension System is Useful and Why It is Not Useful," NBER Working Papers 7592, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Barbara Henman, 2004. "Zu den ökonomischen Zusammenhängen zwischen Renten-, Familien- und Bildungspolitik – Ein Plädoyer für die Aufwertung der Erziehungsrente je Kind," Otto-Wolff-Institut Discussion Paper Series 03/2004, Otto-Wolff-Institut für Wirtschaftsordnung, Köln, Deutschland. [Downloadable!]
  9. Tim Krieger, 2002. "Immigration, Public Pensions, and Heterogenous Voters," Departmental Discussion Papers 112, University of Goettingen, Department of Economics. [Downloadable!]
  10. Holger Bonin & Joan Gil & Concepció Patxot, . "Beyond the Toledo agreement: The intergenerational impact of the Spanish pension reform," Studies on the Spanish Economy 38, FEDEA. [Downloadable!]
    Other versions:
  11. Heikki Oksanen, 2001. "A Case for Partial Funding of Pensions with an Application to the EU Candidate Countries," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
  12. Axel Börsch-Supan, 2002. "Mehr Zuwanderung? Zur Rolle des Auslands bei der Stabilisierung der gesetzlichen Rentenversicherung in Deutschland," MEA discussion paper series 02022, Mannheim Research Institute for the Economics of Aging, University of Mannheim. [Downloadable!]
  13. Gemma Abio Roig, 2003. "Interiority of the Optimal Population Growth Rate with Endogenous Fertility," Working Papers in Economics 96, Universitat de Barcelona. Espai de Recerca en Economia. [Downloadable!]
  14. Hans-Werner Sinn, 1999. "The Crisis of Germany's Pension Insurance System and How It Can Be Resolved," NBER Working Papers 7304, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  15. Alison Booth & Facundo Sepulveda, 2007. "Endogenous Fertility Policy And Unfunded Pensions," CAMA Working Papers 2007-06, Australian National University, Centre for Applied Macroeconomic Analysis. [Downloadable!]
  16. Robert Fenge & Volker Meier, 2003. "Pensions and Fertility Incentives," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
    Other versions:
  17. Bonin, Holger, 2001. "Fiskalische Effekte der Zuwanderung nach Deutschland - Eine Generationenbilanz," IZA Discussion Papers 305, Institute for the Study of Labor (IZA). [Downloadable!]
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