IDEAS home Printed from https://ideas.repec.org/h/spr/sptchp/978-3-030-00989-2_6.html
   My bibliography  Save this book chapter

Pensions

In: Public Economics

Author

Listed:
  • Burkhard Heer

    (University of Augsburg)

Abstract

In this chapter, we first review empirical facts of public pension systems in OECD countries. Subsequently, we introduce a public pension system in the standard two-period overlapping generations (OLG) model of Chap. 2 . We consider two different social security systems, pay-as-you-go (PAYG) versus fully funded. While a fully funded pension system does not have any effect on aggregate savings if capital markets are perfect, aggregate savings fall significantly in a PAYG system. Since public pensions are likely to distort household labor supply decisions, we endogenize labor supply below. In addition, we extend the two-period model to a more realistic 70-period model in which the retirement period is smaller than the working period. Next, we derive the optimal amount of pensions in a PAYG system and study how the demographic transition and aging of the population affect the sustainability of social security. We also discuss the findings of the literature on quantitative pension studies in detail. Finally, we introduce the concept of fiscal space and point out its sensitivity with respect to the aging that takes place in many industrialized countries at present.

Suggested Citation

  • Burkhard Heer, 2019. "Pensions," Springer Texts in Business and Economics, in: Public Economics, chapter 6, pages 245-320, Springer.
    • Handle: RePEc:spr:sptchp:978-3-030-00989-2_6
    DOI: 10.1007/978-3-030-00989-2_6
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:sptchp:978-3-030-00989-2_6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.