Intergenerational Risk Sharing, Stability and Optimality of Alternative Pension Systems
In an analysis of the risk-sharing properties of different types of pension systems, we show that only fixed-fee pay-as-you-go (PAYG) pension systems can provide risk sharing for living individuals. Under some circumstances, however, other PAYG pension systems can enhance the expected welfare of all generations by reducing intergenerational income variability. The paper derives conditions for this to occur. It also analyses the stability of actuarially fair PAYG pension systems. It is shown that if an actuarially fair pension with a non-balanced budget system is dynamically stable, its accumulated surpluses will converge to the same fund as in a fully funded system. The paper also shows that the welfare loss due to labour market distortions will, in fact, increase if the implicit marginal return in a compulsary system is raised above the average return.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
|Date of creation:||Dec 1997|
|Contact details of provider:|| Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.|
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Blanchard Olivier & Weil Philippe, 2001.
"Dynamic Efficiency, the Riskless Rate, and Debt Ponzi Games under Uncertainty,"
The B.E. Journal of Macroeconomics,
De Gruyter, vol. 1(2), pages 1-23, November.
- Olivier J. Blanchard & Philippe Weil, 2001. "Dynamic Efficiency, the Riskless Rate, and Debt Ponzi Games under Uncertainty," Post-Print hal-01030812, HAL.
- Olivier J. Blanchard & Philippe Weil, 2001. "Dynamic Efficiency, the Riskless Rate, and Debt Ponzi Games under Uncertainty," Sciences Po publications info:hdl:2441/8607, Sciences Po.
- Olivier Jean Blanchard & Philippe Weil, 1992. "Dynamic Efficiency, the Riskless Rate, and Debt Ponzi Games Under Uncertainty," NBER Working Papers 3992, National Bureau of Economic Research, Inc.
- Zilcha, Itzhak, 1991. "Characterizing efficiency in stochastic overlapping generations models," Journal of Economic Theory, Elsevier, vol. 55(1), pages 1-16, October.
- Barro, Robert J., 1974.
"Are Government Bonds Net Wealth?,"
3451399, Harvard University Department of Economics.
- Martin Feldstein, 1996.
"The Missing Piece in Policy Analysis: Social Security Reform,"
NBER Working Papers
5413, National Bureau of Economic Research, Inc.
- Feldstein, Martin, 1996. "The Missing Piece in Policy Analysis: Social Security Reform," American Economic Review, American Economic Association, vol. 86(2), pages 1-14, May.
- Roger H. Gordon & Hal R. Varian, 1985.
"Intergenerational Risk Sharing,"
NBER Working Papers
1730, National Bureau of Economic Research, Inc.
- Bohn, Henning, 1995.
"The Sustainability of Budget Deficits in a Stochastic Economy,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 27(1), pages 257-71, February.
- Bohn, H., 1990. "The Sutainability Of Budget Deficits In A Stochastic Economy," Weiss Center Working Papers 6-90, Wharton School - Weiss Center for International Financial Research.
- Smith, Alasdair, 1982. "Intergenerational transfers as social insurance," Journal of Public Economics, Elsevier, vol. 19(1), pages 97-106, October.
- Hassler, John & Lindbeck, Assar, 1997.
"Optimal actuarial fairness in pension systems: A note,"
Elsevier, vol. 55(2), pages 251-255, August.
- Hassler, John & Lindbeck, Assar, 1997. "Optimal Actuarial Fairness in Pension Systems - a Note," Seminar Papers 609, Stockholm University, Institute for International Economic Studies.
- Enders, Walter & Lapan, Harvey E, 1982.
"Social Security Taxation and Intergenerational Risk Sharing,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 23(3), pages 647-58, October.
- Enders, Walter & Lapan, Harvey E., 1982. "Social Security Taxation and Inter-Generational Risk Sharing," Staff General Research Papers Archive 10822, Iowa State University, Department of Economics.
- Orazio Attanasio & Steven J. Davis, 1994.
"Relative Wage Movements and the Distribution of Consumption,"
NBER Working Papers
4771, National Bureau of Economic Research, Inc.
- Attanasio, Orazio & Davis, Steven J, 1996. "Relative Wage Movements and the Distribution of Consumption," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1227-1262, December.
- Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66, pages 467-467.
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:1774. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.