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The International Spillover Effects of Pension Reform

  • Yvonne Adema
  • Lex Meijdam
  • Harrie A. A Verbon

This paper explores how pension reforms in countries with PAYG schemes affect countries with funded systems. We use a two-country two-period overlapping-generations model, where the countries only differ in their pension systems. We distinguish between the case where a reform potentially leads to a Pareto improvement in the PAYG country, and where this is impossible. In the latter case the funded country shares both in the costs and the benefits of the reform. However, if a Pareto-improving pension reform is feasible in the PAYG country, a Pareto improvement in the funded country is not guaranteed.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2005/wp-cesifo-2005-09/cesifo1_wp1540.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1540.

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Date of creation: 2005
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Handle: RePEc:ces:ceswps:_1540
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  1. Meijdam, A.C. & Verhoeven, M.J.M., 1994. "Comparative Dynamics in Perfect-Foresight Models," Discussion Paper 1994-73, Tilburg University, Center for Economic Research.
  2. Feldstein, Martin, 2005. "Structural Reform of Social Security," Scholarly Articles 2794830, Harvard University Department of Economics.
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  5. Yvonne Adema & Lex Meijdam & Harrie Verbon, 2008. "Beggar thy thrifty neighbour," Journal of Population Economics, Springer, vol. 21(4), pages 933-959, October.
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  13. Börsch-Supan, Axel & Ludwig, Alexander & Winter, Joachim, 2001. "Aging, pension reform, and capital flows: A multi-country simulation model," Sonderforschungsbereich 504 Publications 01-08, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
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  23. Pascal Belan & Philippe Michel & Pierre Pestieau, 1998. "Pareto-Improving Social Security Reform," The Geneva Risk and Insurance Review, Palgrave Macmillan, vol. 23(2), pages 119-125, December.
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