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Growth and equality effects of pension plans

Author

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  • DOCQUIER, Frédéric
  • PADDISON, Oliver

Abstract

We investigate the balanced growth effects of pension plans on the rate of growth and on equalityin a closed economy where individual decisions about education are the engine of growth. We distinguish between pay-as-you-go and fully-funded pension systems and differentiate between three different benefit rules: a Beveridgean one (benefits are identical for all agents), a Bismarckian (earnings related) one depending on one's entire earnings history or a Bismarckian one depending on one's partial earnings history. Interestingly, in the latter case the steady state rate of growth is increasing in the rate of contributions.

Suggested Citation

  • DOCQUIER, Frédéric & PADDISON, Oliver, 2000. "Growth and equality effects of pension plans," CORE Discussion Papers 2000036, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2000036
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    File URL: https://uclouvain.be/en/research-institutes/immaq/core/dp-2000.html
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    References listed on IDEAS

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    4. MARCHAND, M. & MICHEL, Ph. & PESTIEAU, P., 1990. "Optimal intergenerational transfers in a growth model with fertility and productivity changes," CORE Discussion Papers 1990059, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. Zhang, Jie, 1995. "Social security and endogenous growth," Journal of Public Economics, Elsevier, vol. 58(2), pages 185-213, October.
    6. Willi Leibfritz & Deborah Roseveare & Douglas Fore & Eckhard Wurzel, 1995. "Ageing Populations, Pension Systems and Government Budgets: How Do They Affect Saving?," OECD Economics Department Working Papers 156, OECD Publishing.
    7. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
    8. Fernández, Raquel & Rogerson, Richard, 1999. "Education finance reform and investment in human capital: lessons from California," Journal of Public Economics, Elsevier, vol. 74(3), pages 327-350, December.
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    11. MARCHAND, Maurice & MICHEL, Philippe & PESTIEAU, Pierre, 1993. "Optimal intergenerational transfers in an endogenous growth model with fertility change," CORE Discussion Papers 1993011, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    12. CASAMATTA, Georges & CREMER, Helmuth & PESTIEAU, Pierre, 1998. "On the political sustainability of redistributive social insurance systems," CORE Discussion Papers 1998038, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    13. Glomm, G. & Kaganovich, M., 1999. "Income Distribution Effects of Public Education and Social Security in a Growing Economy," Papers 9901, Michigan State - Econometrics and Economic Theory.
    14. DOCQUIER, Frédéric & MICHEL, Philippe, 1994. "Education Subsidies and Endogenous Growth : Implications of Demographic Shocks," CORE Discussion Papers 1994052, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    Cited by:

    1. De Genna, Natacha Marie & Stack, Dale M. & Serbin, Lisa A. & Ledingham, Jane & Schwartzman, Alex E., 2007. "Maternal and child health problems: The inter-generational consequences of early maternal aggression and withdrawal," Social Science & Medicine, Elsevier, vol. 64(12), pages 2417-2426, June.

    More about this item

    Keywords

    Public Pensions; Education; Growth; Inequality.;

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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