Reforming pensions : myths, truths, and policy choices
AbstractThis paper discusses the building blocks of pension reform in the light of economic theory, and their application to different types of economy. The opening section sets out the simple economics of pensions. The second section discusses a series of myths which have proved remarkably persistent. Building on this analysis, the latter part of the paper sets out the foundations of effective pensions policy. The third section discusses the prerequisites which any pension reform must respect, i.e. those things which policy advisers can – and should – assert authoritatively. The fourth section turns to the range of choices facing policymakers, drawing on the very different arrangements in different countries. The main conclusions are threefold: 1. The key variable is effective government. 2. From an economic perspective, the difference between Pay-As-You-Go and funding is second order. 3. The range of potential choice over pension design is wide. One size does not fit all.
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Bibliographic InfoPaper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 286.
Date of creation: Apr 2002
Date of revision:
Publication status: Published in International Social Security Review, April, 2002, 55(2), pp. 3-36. ISSN: 0020-871X
Find related papers by JEL classification:
- J1 - Labor and Demographic Economics - - Demographic Economics
- E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
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