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Flexible pension take-up in social security

Author

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  • Adema, Y.

    (Tilburg University, School of Economics and Management)

  • Bonenkamp, J.

    (Tilburg University, School of Economics and Management)

  • Meijdam, Lex

    (Tilburg University, School of Economics and Management)

Abstract

This paper studies the redistribution and welfare effects of increasing the flexibility of individual pension take-up. We use an overlapping-generations model with Beveridgean pay-as-you-go pensions and heterogeneous individuals who differ in ability and lifespan. We find that introducing flexible pension take-up can induce a Pareto improvement when the initial pension scheme contains within-cohort redistribution and induces early retirement. Such a Pareto improving reform entails the application of uniform actuarial adjustment of pension entitlements based on average lifespan. Introducing actuarial non-neutrality that stimulates later retirement further improves such a flexibility reform. Copyright The Author(s) 2016
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Suggested Citation

  • Adema, Y. & Bonenkamp, J. & Meijdam, Lex, 2016. "Flexible pension take-up in social security," Other publications TiSEM 8e9de9ae-c1e4-41e2-8893-7, Tilburg University, School of Economics and Management.
    • Handle: RePEc:tiu:tiutis:8e9de9ae-c1e4-41e2-8893-73a03932f49a
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    1. Pashchenko, Svetlana & Porapakkarm, Ponpoje & Jang, Youngsoo, 2023. "Mortality Regressivity and Pension Design," MPRA Paper 117936, University Library of Munich, Germany.
    2. Komura, Mizuki & Ogawa, Hikaru, 2014. "Pension and the Family," IZA Discussion Papers 8479, Institute of Labor Economics (IZA).

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    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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