Flexible Pension Take-up in Social Security
AbstractAbstract: This paper studies the redistribution and welfare effects of increasing the flexibility of individual pension take-up. We use an overlapping-generations model with Beveridgean pay-as-you-go pensions, where individuals differ in ability and life span. We find that introducing flexible pension take-up can induce a Pareto improvement when the initial pension scheme contains within-cohort redistribution and induces early retirement. Such a Pareto-improving reform entails the application of uniform actuarial adjustment of pension entitlements based on average life expectancy. Introducing actuarial non-neutrality that stimulates later retirement further improves such a flexibility reform.
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Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2013-043.
Date of creation: 2013
Date of revision:
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Web page: http://center.uvt.nl
redistribution; retirement; flexible pensions;
Other versions of this item:
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
This paper has been announced in the following NEP Reports:
- NEP-AGE-2013-08-31 (Economics of Ageing)
- NEP-ALL-2013-08-31 (All new papers)
- NEP-DEM-2013-08-31 (Demographic Economics)
- NEP-DGE-2013-08-31 (Dynamic General Equilibrium)
- NEP-PUB-2013-08-31 (Public Finance)
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