Public Sector Pension Policies and Capital Accumulation in Emerging Economies
AbstractIn many emerging economies pension programs of public sector workers are more generous than pension programs of private sector workers. In this paper we investigate public pension reforms that improve efficiency and welfare by reallocating government resources from non-productive public pensions to productive public education and infrastructure investments. We argue that the opportunity costs of running generous public pension schemes for civil servants are potentially large in emerging economies that often suffer from low public investments in education and infrastructure. In addition, we quantitfy the savings distortions as well as the tax distortions from running a generous public pension program. Calculating transitions to the post-reform steady state, we find that welfare losses for the generation born before the reform are offset by welfare gains by the generations born after the reform.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by School of Economics, The University of New South Wales in its series Discussion Papers with number 2009-10.
Length: 30 pages
Date of creation: Jun 2009
Date of revision:
Contact details of provider:
Postal: Australian School of Business Building, Sydney 2052
Fax: +61)-2- 9313- 6337
Web page: http://www.economics.unsw.edu.au/
More information through EDIRC
Social Security Reform; Generous Public Sector Pensions; Capital Accumulation; Public Education and Infrastructure Investments;
Find related papers by JEL classification:
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- 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-2009-07-03 (All new papers)
- NEP-DEV-2009-07-03 (Development)
- NEP-EDU-2009-07-03 (Education)
- NEP-MAC-2009-07-03 (Macroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Barro, Robert J, 1990.
"Government Spending in a Simple Model of Endogenous Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 98(5), pages S103-26, October.
- Barro, Robert J., 1990. "Government Spending in a Simple Model of Endogeneous Growth," Scholarly Articles 3451296, Harvard University Department of Economics.
- Robert J. Barro, 1991. "Government Spending in a Simple Model of Endogenous Growth," NBER Working Papers 2588, National Bureau of Economic Research, Inc.
- Barro, R.J., 1988. "Government Spending In A Simple Model Of Endogenous Growth," RCER Working Papers 130, University of Rochester - Center for Economic Research (RCER).
- Miguel N. Foguel & Indermit Gill & Rosane Mendonça & Ricardo Paes de Barros, 2000. "The Public-Private Wage Gap in Brazil," Revista Brasileira de Economia, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil), vol. 54(4), pages 433-472, October.
- Pereira, Luiz Carlos Bresser, 1989. "The Perverse Macroeconomics of Debit, Deficit and Inflation in Brazil," Textos para discussÃ£o 2, Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
- Glomm, Gerhard & Jung, Juergen & Tran, Chung, 2009.
"Macroeconomic implications of early retirement in the public sector: The case of Brazil,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 33(4), pages 777-797, April.
- Gerhard Glomm & Juergen Jung & Chung Tran, 2006. "Macroeconomic Implications of Early Retirement in the Public Sector: The Case of Brazil," Caepr Working Papers 2006-008, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
- Glomm, Gerhard & Ravikumar, B., 1994. "Public investment in infrastructure in a simple growth model," Journal of Economic Dynamics and Control, Elsevier, vol. 18(6), pages 1173-1187, November.
- Rangazas, Peter, 2000. "Schooling and economic growth: A King-Rebelo experiment with human capital," Journal of Monetary Economics, Elsevier, vol. 46(2), pages 397-416, October.
- Steven P. Cassou & Kevin J. Lansing, 1995.
"Optimal fiscal policy, public capital, and the productivity slowdown,"
9509, Federal Reserve Bank of Cleveland.
- Cassou, Steven P. & Lansing, Kevin J., 1998. "Optimal fiscal policy, public capital, and the productivity slowdown," Journal of Economic Dynamics and Control, Elsevier, vol. 22(6), pages 911-935, June.
- Sergio G. Ferreira, 2005. "Pension Reform in Brazil: Transitional Issues in a Model with Endogenous Labor Supply," IBMEC RJ Economics Discussion Papers 2005-02, Economics Research Group, IBMEC Business School - Rio de Janeiro.
- Douglas Gollin, 2001.
"Getting Income Shares Right,"
Department of Economics Working Papers
2001-11, Department of Economics, Williams College.
- Palacios, Robert & Whitehouse, Edward, 2006. "Civil-service pension schemes around the world," MPRA Paper 14796, University Library of Munich, Germany.
- Ferreira, Pedro Cavalcanti Gomes & Nascimento, Leandro Gonçalves do, 2005. "Welfare and Growth Effects of Alternative Fiscal Rules for Infrastructure Investment in Brazil," Economics Working Papers (Ensaios Economicos da EPGE) 604, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
- Blankenau, William F. & Simpson, Nicole B., 2004. "Public education expenditures and growth," Journal of Development Economics, Elsevier, vol. 73(2), pages 583-605, April.
- Panizza, Ugo & Qiang, Christine Zhen-Wei, 2005. "Public-private wage differential and gender gap in Latin America: Spoiled bureaucrats and exploited women?," The Journal of Socio-Economics, Elsevier, vol. 34(6), pages 810-833, December.
- Fernandez, Raquel & Rogerson, Richard, 1996. "Income Distribution, Communities, and the Quality of Public Education," The Quarterly Journal of Economics, MIT Press, vol. 111(1), pages 135-64, February.
- Loury, Glenn C, 1981. "Intergenerational Transfers and the Distribution of Earnings," Econometrica, Econometric Society, vol. 49(4), pages 843-67, June.
- Ugo Panizza, 2001. "Public Sector Wages and Bureaucratic Quality: Evidence from Latin America," Journal of LACEA Economia, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
- Ugo Panizza, 2000. "The Public Sector Premium and the Gender Gap in Latin America: Evidence from the 1980s and 1990s," Research Department Publications 4229, Inter-American Development Bank, Research Department.
- Marcos Bonturi, 2002. "The Brazilian Pension System: Recent Reforms and Challenges Ahead," OECD Economics Department Working Papers 340, OECD Publishing.
- Holtz-Eakin, Douglas, 1994. "Public-Sector Capital and the Productivity Puzzle," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 12-21, February.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:CitEc Project, subscribe to its RSS feed for this item.
- Gerhard Glomm & Juergen Jung, 2013. "A Macroeconomic Analysis of Energy Subsidies in a Small Open Economy," Working Papers 2013-02, Towson University, Department of Economics, revised Feb 2013.
- Gerhard Glomm & Juergen Jung, 2010. "A Macroeconomic Analysis of the Fiscal System in Egypt," Working Papers 2010-17, Towson University, Department of Economics, revised Oct 2010.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guillaume Roger) The email address of this maintainer does not seem to be valid anymore. Please ask Guillaume Roger to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.