Old Age Consumption and Pension Policy in a Two-Tier Developing Economy
In a number of developing countries, an important part of the economy is informal both in terms of production and of social protection. In this paper we consider introducing a universal pension system in the formal sector. It is shown to have two main effects: first, it makes the formal sector more attractive to migration and second, it affects capital accumulation in a way that depends on the type of social security introduced, PAYG or funded, and its induced effect on private saving.
Volume (Year): 16 (2003)
Issue (Month): 1 (Spring)
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