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Umlagefinanzierung als Humankapitaldeckung: Grundrisse eines erneuerten „Generationenvertrages“ / Pay-as-you-go Public Pension Schemes Revisited: A Draft


  • Werding Martin

    (Universität Passau, Lehrstuhl für VWL mit Schwerpunkt Wirtschafts- und Sozialpolitik, Innstr. 27, D-94032 Passau)


If considered within the context of an overlapping-generations framework, pay-as-you-go pension systems turn out to be funded by the human capital embodied in subsequent generations. The failure to actually model public old-age security on this idea may, to a large degree, explain the current crises of virtually all existing pay-as-you-go schemes. The paper sketches in some detail the basic features of a new pay-as-you-go mechanism which has been revised along these lines. Essentially, schemes of this type would be based on an explicit link between public retirement pensions and both private and public spending on human capital. The most important advantages of this solution are as follows: it neutralizes the demographic risks of providing for the elderly; it creates the right incentives to engage in old-age provision and human capital formation; and, last but not least, it conforms with rather complex notions of equity and social justice.

Suggested Citation

  • Werding Martin, 1999. "Umlagefinanzierung als Humankapitaldeckung: Grundrisse eines erneuerten „Generationenvertrages“ / Pay-as-you-go Public Pension Schemes Revisited: A Draft," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 218(3-4), pages 491-511, June.
  • Handle: RePEc:jns:jbstat:v:218:y:1999:i:3-4:p:491-511

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