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Optimal Pension Systems with Simple Instruments

Author

Listed:
  • Mikhail Golosov
  • Ali Shourideh
  • Maxim Troshkin
  • Aleh Tsyvinski

Abstract

We analyze optimal pension systems relying on simple policy instruments in a lifecycle environment which admits endogenous decisions of how much to work as well as when to retire. The optimality in this context means the highest welfare that can be achieved within a restricted set of instruments, while keeping the total cost of the pension system unchanged. The policy instruments we consider are the optimized retirement benefit functions modeled after a stylized version of the current US Social Security.

Suggested Citation

  • Mikhail Golosov & Ali Shourideh & Maxim Troshkin & Aleh Tsyvinski, 2013. "Optimal Pension Systems with Simple Instruments," American Economic Review, American Economic Association, vol. 103(3), pages 502-507, May.
    • Handle: RePEc:aea:aecrev:v:103:y:2013:i:3:p:502-07
    Note: DOI: 10.1257/aer.103.3.502
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    Citations

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    Cited by:

    1. Marc Fleurbaey & Marie‐Louise Leroux & Pierre Pestieau & Gregory Ponthiere, 2016. "Fair Retirement Under Risky Lifetime," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57(1), pages 177-210, February.
    2. Ferey, Antoine, 2022. "Redistribution and Unemployment Insurance," Rationality and Competition Discussion Paper Series 345, CRC TRR 190 Rationality and Competition.
    3. Schön, Matthias, 2020. "Demographic change and the rate of return in PAYG pension systems," Discussion Papers 57/2020, Deutsche Bundesbank.
    4. Daniel Harenberg & Alexander Ludwig, "undated". "Social Security and the Interactions Between Aggregate and Idiosyncratic Risk," Working Papers ETH-RC-14-002, ETH Zurich, Chair of Systems Design.
    5. Marcus Berliant & Shota Fujishima, 2017. "Optimal income taxation with a stationarity constraint in a dynamic stochastic economy," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 19(3), pages 739-747, June.
    6. Ludwig, Alexander, 2016. "Das Deutsche Rentensystem: Thesen zur derzeitigen Diskussion um "Umkehr"-Reformen," SAFE White Paper Series 40, Leibniz Institute for Financial Research SAFE.
    7. Cormac O'Dea, 2018. "Insurance, Efficiency and the Design of Public Pensions," 2018 Meeting Papers 1037, Society for Economic Dynamics.
    8. Daniel Harenberg & Alexander Ludwig, 2019. "Idiosyncratic Risk, Aggregate Risk, And The Welfare Effects Of Social Security," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(2), pages 661-692, May.
    9. Kudrna, George & Tran, Chung & Woodland, Alan, 2022. "Sustainable and equitable pensions with means testing in aging economies," European Economic Review, Elsevier, vol. 141(C).
    10. No authors listed, 2016. "Überlegungen zur fairen und nachhaltigen Ausgestaltung eines Pensionskontensystems," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 159, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    11. Blundell, R. & French, E. & Tetlow, G., 2016. "Retirement Incentives and Labor Supply," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 457-566, Elsevier.
    12. Yiqing Xing & Anqi Li, 2014. "Simple Labor Income Tax Systems with Endogenous Employment Contracts," 2014 Meeting Papers 866, Society for Economic Dynamics.
    13. Sánchez-Romero, Miguel & Prskawetz, Alexia, 2017. "Redistributive effects of the US pension system among individuals with different life expectancy," The Journal of the Economics of Ageing, Elsevier, vol. 10(C), pages 51-74.

    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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