Reform of the Canada Pension Plan
AbstractLike other transfer programs, a pay-as-you-go public pension system can significantly affect economic behavior and, hence, relative prices and macroeconomic aggregates. This paper illustrates some of these effects, which are important in weighing options for reforming public pensions, in the context of a stylized model of the Canadian economy. It shows that introducing such a system can reduce aggregate saving, income, and wages and increase interest rates. It also shows that a significant part of the distortion can occur because benefits are not explicitly linked to contributions and that creating a linkage can reduce the distortions associated with the wage tax that funds plan contributions.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 97/141.
Date of creation: 01 Oct 1997
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- Gern, Klaus-Jürgen, 1998. "Recent developments in old-age pension systems: an international overview," Kiel Working Papers 863, Kiel Institute for the World Economy.
- Klaus-Jürgen Gern, 2002. "Recent Developments in Old Age Pension Systems: An International Overview," NBER Chapters, in: Social Security Pension Reform in Europe, pages 439-478 National Bureau of Economic Research, Inc.
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