Pensions containing allowance paid by children – why and how?
The present pension systems allocate only a minimal allowance (about 1 or 2% of the total pension budget) to those who raise children, endangering the reproduction of the population and leading to an ageing society. Here we suggest a pension model based on the expenses of child-raising families amounting to 10 to 15% of the total amount of pensions (about 25% of mothers’ pensions). The financial source of this system can be a separated and well-defined ratio of children’s pension contributions paid for at least 13 years until the age of 37. Mothers reaching the retirement age could obtain the suggested pre-determined amount of pension supplement (approximately HUF 140 thousand per children tailored to the demographic and economic conditions in Hungary). According to the financial balance of our model, the net effect on the state pension budget would be negligible. While the total amount of the pension budget with the changes concerning mothers would largely remain unchanged (according to the forecasts), its structure could significantly favour families raising children and it could have a positive impact on the social preferences of the population.
References listed on IDEAS
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- Helmuth Cremer & Firouz Gahvari & Pierre Pestieau, 2009.
"Fertility, Human Capital Accumulation, and the Pension System,"
CESifo Working Paper Series
2736, CESifo Group Munich.
- Cremer, Helmuth & Gahvari, Firouz & Pestieau, Pierre, 2011. "Fertility, human capital accumulation, and the pension system," Journal of Public Economics, Elsevier, vol. 95(11), pages 1272-1279.
- CREMER, Helmuth & GAHVARI, Firouz & PESTIEAU, Pierre, 2010. "Fertility, human capital accumulation, and the pension system," CORE Discussion Papers 2010054, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- CREMER, Helmuth & GAHVARI, Firouz & PESTIEAU, Pierre, . "Fertility, human capital accumulation, and the pension system," CORE Discussion Papers RP -2366, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Cigno, Alessandro, 2009.
"How to Avoid a Pension Crisis: A Question of Intelligent System Design,"
IZA Policy Papers
4, Institute for the Study of Labor (IZA).
- Alessandro Cigno, 2010. "How to Avoid a Pension Crisis: A Question of Intelligent System Design ," CESifo Economic Studies, CESifo, vol. 56(1), pages 21-37, March.
- Alessandro Cigno, 2009. "How to avoid a pension crisis: A question of intelligent system design," CHILD Working Papers wp04_09, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
- Alessandro Cigno, 2009. "How to Avoid a Pension Crisis: A Question of Intelligent System Design," CESifo Working Paper Series 2590, CESifo Group Munich.
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