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Should pensions be progressive?

  • Fehr, Hans
  • Kallweit, Manuel
  • Kindermann, Fabian

The present paper quantitatively characterizes the consequences of rising pension progressivity in an overlapping generations model with idiosyncratic income, disability and longevity risk as well as endogenous labor supply at the intensive and extensive margin. Focusing on the German pension system which is purely earnings related, we increase the degree of progressivity and compute the optimal mix between flat and earnings-related pensions.

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Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 63 (2013)
Issue (Month): C ()
Pages: 94-116

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Handle: RePEc:eee:eecrev:v:63:y:2013:i:c:p:94-116
Contact details of provider: Web page: http://www.elsevier.com/locate/eer

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