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Flexible pension take-up in social security

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Listed:
  • Jan Bonenkamp
  • Yvonne Adema
  • Lex Meijdam

Abstract

This paper studies the redistribution and welfare effects of increasing the flexibility of individual pension take-up. We use an overlapping-generations model with Beveridgean pay-as-you-go pensions, where individuals differ in ability and life span. We find that introducing flexible pension take-up can induce a Pareto improvement when the initial pension scheme contains within-cohort redistribution and induces early retirement. Such a Pareto-improving reform entails the application of uniform actuarial adjustment of pension entitlements based on average life expectancy. Introducing actuarial non-neutrality that stimulates later retirement further improves such a flexibility reform.

Suggested Citation

  • Jan Bonenkamp & Yvonne Adema & Lex Meijdam, 2013. "Flexible pension take-up in social security," CPB Discussion Paper 254, CPB Netherlands Bureau for Economic Policy Analysis.
    • Handle: RePEc:cpb:discus:254
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    2. Komura, Mizuki & Ogawa, Hikaru, 2014. "Pension and the Family," IZA Discussion Papers 8479, Institute of Labor Economics (IZA).

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    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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