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How to Avoid a Pension Crisis: A Question of Intelligent System Design

  • Alessandro Cigno

Conventional pension systems suffer from a design defect, which makes them financially unsustainable, and a source of inefficiency for the economy as a whole. The article outlines a second-best policy which includes a public pension system made up of two parallel schemes, a Bismarckian one allowing individuals to qualify for a pension by working and paying contributions in the usual way, and an unconventional one allowing them to qualify for a pension by having children, and investing time and money in their upbringing. (JEL codes: D13, D64, H55, J13, J14 and J26) Copyright The Author 2009. Published by Oxford University Press on behalf of Ifo Institute for Economic Research, Munich. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org, Oxford University Press.

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File URL: http://hdl.handle.net/10.1093/cesifo/ifp024
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Article provided by CESifo in its journal CESifo Economic Studies.

Volume (Year): 56 (2010)
Issue (Month): 1 (March)
Pages: 21-37

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Handle: RePEc:oup:cesifo:v:56:y:2010:i:1:p:21-37
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  1. Robert Fenge & Volker Meier, 2005. "Pensions and fertility incentives," Canadian Journal of Economics, Canadian Economics Association, vol. 38(1), pages 28-48, February.
  2. Cigno, Alessandro & Rosati, Furio Camillo, 1992. "The Effects of Financial Markets and Social Security on Saving and Fertility Behaviour in Italy," Journal of Population Economics, Springer, vol. 5(4), pages 319-41.
  3. Cigno, Alessandro & Luporini, Annalisa & Pettini, Anna, 2003. "Transfers to families with children as a principal-agent problem," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 1165-1177, May.
  4. Cigno, Alessandro, 2006. "Is There a Social Security Tax Wedge?," IZA Discussion Papers 1967, Institute for the Study of Labor (IZA).
  5. Ehrlich, Isaac & Zhong, Jian-Guo, 1998. "Social Security and the Real Economy: An Inquiry into Some Neglected Issues," American Economic Review, American Economic Association, vol. 88(2), pages 151-57, May.
  6. Gary S. Becker & Robert J. Barro, 1986. "A Reformulation of the Economic Theory of Fertility," NBER Working Papers 1793, National Bureau of Economic Research, Inc.
  7. Cigno, Alessandro & Giannelli, Gianna Claudia & Rosati, Furio C. & Vuri, Daniela, 2004. "Is There Such a Thing as a Family Constitution? A Test Based on Credit Rationing," IZA Discussion Papers 1116, Institute for the Study of Labor (IZA).
  8. Alessandro Cigno & Martin Werding, 2007. "Children and Pensions," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262033690, June.
  9. T. Paul Schultz, 2007. "Population Policies, Fertility, Women's Human Capital, and Child Quality," Working Papers 954, Economic Growth Center, Yale University.
  10. Schultz, T. Paul, 2007. "Population Policies, Fertility, Women’s Human Capital, and Child Quality," IZA Discussion Papers 2815, Institute for the Study of Labor (IZA).
  11. Peter A. Diamond & Peter R. Orszag, 2005. "Saving Social Security," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 11-32, Spring.
  12. Jie Zhang & Junsen Zhang, 2004. "How does social security affect economic growth? Evidence from cross-country data," Journal of Population Economics, Springer, vol. 17(3), pages 473-500, 08.
  13. Charles Hohm, 1975. "Social security and fertility: An international perspective," Demography, Springer, vol. 12(4), pages 629-644, November.
  14. Diamond Peter A & Orszag Peter R, 2005. "Saving Social Security: The Diamond-Orszag Plan," The Economists' Voice, De Gruyter, vol. 2(1), pages 1-9, April.
  15. Alessandro Cigno & Annalisa Luporini & Anna Pettini, 2004. "Hidden information problems in the design of family allowances," Journal of Population Economics, Springer, vol. 17(4), pages 645-655, December.
  16. Cigno, Alessandro, 1986. "Fertility and the Tax-Benefit System: A Reconsideration of the Theory of Family Taxation," Economic Journal, Royal Economic Society, vol. 96(384), pages 1035-51, December.
  17. Entwisle, Barbara & Winegarden, C R, 1984. "Fertility and Pension Programs in LDCs: A Model of Mutual Reinforcement," Economic Development and Cultural Change, University of Chicago Press, vol. 32(2), pages 331-54, January.
  18. Alessandro Cigno & Luca Casolaro & Furio C. Rosati, 2002. "The Impact of Social Security on Saving and Fertility in Germany," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 59(2), pages 189-, May.
  19. Martin Werding & Herbert Hofmann, 2006. "Die fiskalische Bilanz eines Kindes im deutschen Steuer- und Sozialsystem," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 59(02), pages 28-36, 01.
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