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Redistribution, Pension Systems and Capital Accumulation

  • Christophe Hachon


    (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

In this paper we study the macroeconomic impact of a policy which changes the redistributive properties of an unfunded pension system. Using an overlapping generations model with a closed economy and heterogenous agents, we show that a weaker linkbetween contributions and benefits has an impact on the level of capital per capita if and only if there are inequalities of length of life. Furthermore, this policy has positive implications for every agent of the economy if the system has a defined-benefitstructure. The tax rate and inequalities decrease, whereas the wealth of each agent increases. However, with a defined-contribution pension system, this policy has a negative impact on every macroeconomic variable except on the wealth of the poorest agents.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00279167.

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Date of creation: 14 May 2008
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Handle: RePEc:hal:cesptp:halshs-00279167
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