Why Funding is not a Solution to the "Social Security Crisis"
AbstractIt is now a commonplace that the unfunded public pension systems of many OECD countries will run into severe financing problems in the coming decades due to a dramatically increasing pensioner/worker ratio. While this diagnosis is completely undisputed, there is still a vigorous debate on the appropriate therapy. In this debate, a number of proposals have been brought forward in particular in the last five years, which mainly consist in a (partial) transition to a funded pension system. Because such a transition is not a Pareto improvement, it is necessary to ask what can be the policy target that justifies such a redistributive move? The present paper tries to examine this question by identifying seven fallacies that are commonly made by advocates of such a transition.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 328.
Length: 17 pages
Date of creation: Jul 2001
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Other versions of this item:
- Friedrich Breyer, 2001. "Why Funding Is not a Solution to the "Social Security Crisis"," Discussion Papers of DIW Berlin 254, DIW Berlin, German Institute for Economic Research.
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-07-13 (All new papers)
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