Do Redistributive Pension Systems Increase Inequalities and Welfare?
Using a capital-skill complementarity technology, we analytically show that an increase in the direct redistributivity of Pay-As-You-Go (PAYG) pension systems has a positive impact on wages and on wage inequalities. We also show that life expectancyinequalities play an important role in the achievement of these results. Then, we calibrate our model and we and that, if life expectancy inequalities are suffciently high, a more redistributive pension system increases the wealth and the welfare of every agent of the economy. Moreover, such a policy decreases the tax rate of the pension system.
|Date of creation:||04 Jun 2008|
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|Note:||View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00285040|
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