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Who Really Benefits from Pension Systems?

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  • Christophe Hachon

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

A growing empirical literature shows that life expectancy depends on the wage level. Using an overlapping generations model with a small open economy, we explain why this result can change theredistributive properties of unfunded pension systems. We use the concept of "net contribution" to measure this redistributivity of pension systems. We show that Beveridgian pension systems remainprogressive. However, the poorest do not necessarily benefit the most from pension systems. For Bismarkian pension systems, net contributions are regressive. It means that poor agents pay morefor the pension system than they receive from it. Conversely, rich agents receive more from the pension system than they pay for it. For mixed pension systems, it is possible that collected resources are redistributed in favour of the ends of the distribution of wages.

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  • Christophe Hachon, 2008. "Who Really Benefits from Pension Systems?," Working Papers halshs-00279651, HAL.
    • Handle: RePEc:hal:wpaper:halshs-00279651
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00279651
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    References listed on IDEAS

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