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A note on intergenerational risk sharing and the design of pay-as-you-go pension programs

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Listed:
  • ûystein ThÛgersen

    () (SNF and Norwegian School of Economics and Business Administration, Institute of Economics, Helleveien 30, N-5035 Bergen-Sandviken, Norway)

Abstract

Different versions of pay-as-you-go public pension programs may have entirely different effects on the intergenerational distribution of income risk. If the pension benefit is a fixed proportion of previous labor income, a pay-as-you-go program increases the net income risk of all generations. On the other hand, a pay-as-you-go program characterized by a fixed labor income tax rate and uncertain pension benefits provides intergenerational risk sharing.

Suggested Citation

  • ûystein ThÛgersen, 1998. "A note on intergenerational risk sharing and the design of pay-as-you-go pension programs," Journal of Population Economics, Springer;European Society for Population Economics, vol. 11(3), pages 373-378.
  • Handle: RePEc:spr:jopoec:v:11:y:1998:i:3:p:373-378 Note: Received: 10 December 1996 / Accepted: 24 November 1997
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    References listed on IDEAS

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    1. Javier Gardeazabal & Arantza Ugidos, 2005. "Gender wage discrimination at quantiles," Journal of Population Economics, Springer;European Society for Population Economics, pages 165-179.
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    7. James Albrecht & Aico van Vuuren & Susan Vroman, 2004. "Decomposing the Gender Wage Gap in the Netherlands with Sample Selection Adjustments," Tinbergen Institute Discussion Papers 04-123/3, Tinbergen Institute.
    8. José Mata & José A. F. Machado, 2005. "Counterfactual decomposition of changes in wage distributions using quantile regression," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 445-465.
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    Cited by:

    1. Bravo, Jorge Horacio, 2000. "Population ageing and pension systems in Latin America," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    2. Wagener, Andreas, 2004. "On intergenerational risk sharing within social security schemes," European Journal of Political Economy, Elsevier, vol. 20(1), pages 181-206, March.
    3. Lucas Bretschger & Karen Pittel, 2005. "Innovative Investments, Natural Resources and Intergenerational Fairness: Are Pension Funds Good for Sustainable Development?," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), pages 355-376.
    4. Jovan Zamac, 2005. "Pension Design when Fertility Fluctuates: The Role of Capital Mobility and Education Financing," CESifo Working Paper Series 1569, CESifo Group Munich.
    5. Roel Beetsma & Ward Romp, 2013. "Participation Constraints in Pension Systems," Tinbergen Institute Discussion Papers 13-149/VI, Tinbergen Institute.
    6. Holmberg, Pär, 2009. "Numerical calculation of an asymmetric supply function equilibrium with capacity constraints," European Journal of Operational Research, Elsevier, pages 285-295.
    7. repec:onb:oenbwp:y::i:146:b:1 is not listed on IDEAS
    8. Knell, Markus, 2010. "How automatic adjustment factors affect the internal rate of return of PAYG pension systems," Journal of Pension Economics and Finance, Cambridge University Press, vol. 9(01), pages 1-23, January.
    9. De Menil, Georges & Murtin, Fabrice & Sheshinski, Eytan & Yokossi, Tite, 2016. "A rational, economic model of paygo tax rates," European Economic Review, Elsevier, vol. 89(C), pages 55-72.
    10. Friedrich Breyer, 2000. "Kapitaldeckungs- versus Umlageverfahren," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 1(4), pages 383-405, November.
    11. R. Beetsma & A. L. Bovenberg, 2006. "Pension systems, intergenerational risk sharing and inflation," European Economy - Economic Papers 2008 - 2015 257, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    12. Godbout, Luc & Trudel, Yves & St-Cerny, Suzie, 2013. "Le régime de rentes du Québec : le rendement différencié selon l’année de prise de la retraite de 1968 jusqu’en 2056," L'Actualité Economique, Société Canadienne de Science Economique, vol. 89(2), pages 89-113, Juin.
    13. Friedrich Breyer & Mathias Kifmann, 2004. "The German Retirement Benefit Formula: Drawbacks and Alternatives," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 60(1), pages 1-63, April.
    14. repec:eee:hapoch:v1_781 is not listed on IDEAS

    More about this item

    Keywords

    Intergenerational risk sharing · social security · public pension programs;

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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