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Means-tested or Flat Pension? Pension Credit

Author

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  • Andras Simonovits

    (Institute of Economics, Research Center for Economic and Regional Studies,)

Abstract

Pension systems fight myopia and reduce old-age poverty. Our simple model introduces heterogeneous wages, flexible labor supply, progressive personal income tax and pension credit. The socially optimal transfer system is close to the means-tested one proposed by Feldstein (1987).

Suggested Citation

  • Andras Simonovits, 2012. "Means-tested or Flat Pension? Pension Credit," CERS-IE WORKING PAPERS 1221, Institute of Economics, Centre for Economic and Regional Studies.
    • Handle: RePEc:has:discpr:1221
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    File URL: http://econ.core.hu/file/download/mtdp/MTDP1221.pdf
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    References listed on IDEAS

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    1. Feldstein, Martin S, 1987. "Should Social Security Benefits Be Means Tested?," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 468-484, June.
    2. Zsolt Darvas, 2012. "Real effective exchange rates for 178 countries: A new database," CERS-IE WORKING PAPERS 1210, Institute of Economics, Centre for Economic and Regional Studies.
    3. Judit Markus & Anna Radvanyi & Miklos Pinter, 2012. "The Shapley Value for Airport and Irrigation Games," CERS-IE WORKING PAPERS 1207, Institute of Economics, Centre for Economic and Regional Studies.
    4. Judit Karsai, 2012. "Development of the Hungarian Venture Capital and Private Equity Industry over the Past Two Decades," CERS-IE WORKING PAPERS 1201, Institute of Economics, Centre for Economic and Regional Studies.
    5. Zsombor Z. Méder & András Simonovits & János Vinczeb, 2012. "Tax Morale and Tax Evasion: Social Preferences and Bounded Rationality," Economic Analysis and Policy, Elsevier, vol. 42(2), pages 171-188, September.
    6. Judit Karsai, 2013. "Venture capital and private equity industry in Hungary," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 63(1), pages 23-42, March.
    7. Zsolt Darvas, 2011. "A tale of three countries- recovery after banking crises," Policy Contributions 663, Bruegel.
    8. Clark, Tom & Emmerson, Carl, 2003. "Privatising provision and attacking poverty? The direction of UK Pension Policy under new Labour," Journal of Pension Economics and Finance, Cambridge University Press, vol. 2(1), pages 67-89, March.
    9. James Sefton & Justin vandeVen & Martin Weale, 2008. "Means Testing Retirement Benefits: fostering equity or discouraging savings?," Economic Journal, Royal Economic Society, vol. 118(528), pages 556-590, April.
    10. Varian, Hal R., 1980. "Redistributive taxation as social insurance," Journal of Public Economics, Elsevier, vol. 14(1), pages 49-68, August.
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    Citations

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    Cited by:

    1. Andras Simonovits, 2012. "Optimal linear redistributive tax and pension systems with flexible labor supply," CERS-IE WORKING PAPERS 1233, Institute of Economics, Centre for Economic and Regional Studies.
    2. Andras Simonovits, 2013. "A family of simple paternalistic transfer models," CERS-IE WORKING PAPERS 1324, Institute of Economics, Centre for Economic and Regional Studies.

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    More about this item

    Keywords

    myopia; flat-plus pension; means-tested pension; pension credit;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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