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Pensions and Contemporary Socioeconomic Change

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  • Lindbeck, Assar

    () (Institute for International Economic Studies, Stockholm University)

Abstract

In developed countries, pension systems emerged as a political response to socio-econo-mic changes brought about by industrialisation and urbanisation in the late 19th and early 20th centuries. Today, new socio-economic changes create both rationales and poli-ti-cal forces for revisions of existing pension systems. Changes in demo-gra-phy, real wage growth and real interest rates are perhaps the most obvious exam-ples. Increased instability of the family, more heterogeneity among individuals, greater international mobility of labour and capital, and ambitions to encourage individual responsibility also have important implications for pension systems. When discussing these issues, it is useful to set up a more elaborate classification of pension systems than the usual distinction between defined-benefit (DB) and defined-contribution (DC) systems. The choice of an appropriate taxonomy depends, of course, on the issues to be raised. One question that is focused on in this paper concerns the consequences of socio-economic shocks on the distribution of income and the sharing of income risk among generations. It turns out that the distinction between pension systems with exogenous and endogenous contribution rates (tax rates) then becomes crucial. But the paper also deals with socio-economic changes that are induced by the pension system itself via behavioural adjustments of individuals – and the feedback of these changes on the pension system. When dealing with such adjust-ments, highly relevant features of pension systems are the degree to which they are actuarial and funded, respectively – two aspects that are related but not the identical.

Suggested Citation

  • Lindbeck, Assar, 2000. "Pensions and Contemporary Socioeconomic Change," Seminar Papers 685, Stockholm University, Institute for International Economic Studies.
  • Handle: RePEc:hhs:iiessp:0685
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Lindbeck, Assar & Persson, Mats, 2000. "What Are the Gains from Pension Reform?," Working Paper Series 535, Research Institute of Industrial Economics.
    2. Wagener, Andreas, 2004. "On intergenerational risk sharing within social security schemes," European Journal of Political Economy, Elsevier, vol. 20(1), pages 181-206, March.
    3. Jovan Zamac, 2005. "Pension Design when Fertility Fluctuates: The Role of Capital Mobility and Education Financing," CESifo Working Paper Series 1569, CESifo Group Munich.
    4. Thomas Aronsson & James R. Walker, 2010. "Labor Supply, Tax Base and Public Policy in Sweden," NBER Chapters,in: Reforming the Welfare State: Recovery and Beyond in Sweden, pages 127-158 National Bureau of Economic Research, Inc.
    5. Zamac , Jovan, 2005. "Winners and Losers from a Demographic Shock under Different Intergenerational Transfer Schemes," Working Paper Series 2005:13, Uppsala University, Department of Economics.
    6. Bossi, Luca, 2008. "Intergenerational risk shifting through social security and bailout politics," Journal of Economic Dynamics and Control, Elsevier, vol. 32(7), pages 2240-2268, July.
    7. Feldstein, Martin, 2001. "Economic Problems of Ireland in Europe - incorporating 2 other Papers The Cost and Distribution of Tax Expenditure on Occupational Pensions in Ireland by G Hughes and The National Pensions Reserve Fun," Research Series, Economic and Social Research Institute (ESRI), number GLS31.
    8. Zamac, Jovan, 2007. "Pension design when fertility fluctuates: The role of education and capital mobility," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 619-639, April.

    More about this item

    Keywords

    social security; pensions; social security reform;

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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