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Pension reform with migration and mobile capital: is a Pareto improvement possible?

Listed author(s):
  • Igor Fedotenkov

    ()

  • Lex Meijdam

    ()

This paper shows that in a two-country two-overlapping-generations model with migration, capital mobility and an immobile production factor (land), a locally welfare-improving pension reform at the cost of the neighboring country is possible if land plays a minor role in production. Furthermore, differences in the size of the PAYG pension schemes between the countries distort the international allocation of labour and capital. As a result, a Pareto-improving pension reform is possible if countries employ PAYG pension schemes of different size, provided that a federal government exists that redistributes benefits and losses of the reform both intergenerationally and internationally. Copyright Springer-Verlag Berlin Heidelberg 2014

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File URL: http://hdl.handle.net/10.1007/s10368-013-0259-2
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Article provided by Springer in its journal International Economics and Economic Policy.

Volume (Year): 11 (2014)
Issue (Month): 3 (September)
Pages: 431-450

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Handle: RePEc:kap:iecepo:v:11:y:2014:i:3:p:431-450
DOI: 10.1007/s10368-013-0259-2
Contact details of provider: Web page: http://www.springer.com

Order Information: Web: http://www.springer.com/economics/international+economics/journal/10368/PS2

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