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Credible pensions

Author

Listed:
  • Besley, Timothy
  • Prat, Andrea

Abstract

One of the main problems in pension policy is to develop an institutional framework that guarantees that public and private pensions promises are kept. This paper discusses how the governance of public and private pensions is key to making such promises credible. It argues that credibility concerns undermine the case for earnings-related pensions run by the state and private defined benefit plans.

Suggested Citation

  • Besley, Timothy & Prat, Andrea, 2004. "Credible pensions," LSE Research Online Documents on Economics 24822, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:24822
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    File URL: http://eprints.lse.ac.uk/24822/
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    References listed on IDEAS

    as
    1. Mulligan Casey B & Sala-i-Martin Xavier, 2004. "Political and Economic Forces Sustaining Social Security," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-56, May.
    2. Rabin, Mathew, 2002. "A Perspective on Psychology and Economics," Department of Economics, Working Paper Series qt4z78n1r9, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    3. Rabin, Matthew, 2002. "A perspective on psychology and economics," European Economic Review, Elsevier, vol. 46(4-5), pages 657-685, May.
    4. Mulligan Casey B & Sala-i-Martin Xavier, 2004. "Internationally Common Features of Public Old-Age Pensions, and Their Implications for Models of the Public Sector," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-37, May.
    5. Tito Boeri & Axel Börsch-Supan & Guido Tabellini, 2001. "Would you like to shrink the welfare state? A survey of European citizens," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 16(32), pages 08-50.
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    Citations

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    Cited by:

    1. Mario Jametti, 2007. "Underfunding of Defined Benefit Pension Plans and Benefit Guarantee Insurance - An Overview of Theory and Empirics," Working Papers 2007_1, York University, Department of Economics.
    2. Jiří Večerník, 2006. "Changing Social Status of Pensioners and the Prospects of Pension Reform in the Czech Republic," Prague Economic Papers, Prague University of Economics and Business, vol. 2006(3), pages 195-213.
    3. Mariangela Bonasia & Oreste Napolitano, 2007. "Do Fundamentals and Credibility Matter in a Funded Pension System ?A Markov Switching Analysis for Australia and Iceland," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 50(2), pages 221-248.
    4. Greco, Luciano G., 2006. "The optimal design of funded pensions," LSE Research Online Documents on Economics 24519, London School of Economics and Political Science, LSE Library.

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    More about this item

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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