Why Funding is not a Solution to the "Social Security Crisis"
It is now a commonplace that the unfunded public pension systems of many OECD countries will run into severe financing problems in the coming decades due to a dramatically increasing pensioner/worker ratio. While this diagnosis is completely undisputed, there is still a vigorous debate on the appropriate therapy. In this debate, a number of proposals have been brought forward in particular in the last five years, which mainly consist in a (partial) transition to a funded pension system. Because such a transition is not a Pareto improvement, it is necessary to ask what can be the policy target that justifies such a redistributive move? The present paper tries to examine this question by identifying seven fallacies that are commonly made by advocates of such a transition.
|Date of creation:||Jul 2001|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
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.:
- Breyer, Friedrich & von der Schulenburg, J-Matthias Graf, 1990. " Family Ties and Social Security in a Democracy," Public Choice, Springer, vol. 67(2), pages 155-67, November.
- Brunner, Johann K., 1993.
"Transition from a pay-as-you-go to a fully-funded pension system: The case of differing individuals and intragenerational fairness,"
Discussion Papers, Series I
266, University of Konstanz, Department of Economics.
- Brunner, Johann K., 1996. "Transition from a pay-as-you-go to a fully funded pension system: The case of differing individuals and intragenerational fairness," Journal of Public Economics, Elsevier, vol. 60(1), pages 131-146, April.
- Homburg, Stefan, 2000. "Compulsory savings in the welfare state," Journal of Public Economics, Elsevier, vol. 77(2), pages 233-239, August.
- Martin Feldstein & Andrew Samwick, 1996.
"The Transition Path in Privatizing Social Security,"
NBER Working Papers
5761, National Bureau of Economic Research, Inc.
- Martin Feldstein & Andrew Samwick, 1998. "The Transition Path in Privatizing Social Security," NBER Chapters, in: Privatizing Social Security, pages 215-264 National Bureau of Economic Research, Inc.
- Homburg, Stefan, 2014.
"Old Age Pension Systems: A Theoretical Evaluation,"
Hannover Economic Papers (HEP)
dp-524, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
- Mathias Kifman & Dirk Schindler, 2000. "Smoothing the Implicit Tax Rate in a Pay-as-you-go Pension System," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 57(3), pages 261-, May.
- 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.
- Breyer, Friedrich & Graf v d Schulenburg, J-Matthias, 1987. "Voting on Social Security: The Family as Decision-Making Unit," Kyklos, Wiley Blackwell, vol. 40(4), pages 529-47.
When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp328. 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: (Mark Fallak)
If references are entirely missing, you can add them using this form.