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Rational Pension Reform


  • Axel Börsch-Supan

    () (Munich Center for the Economics of Aging (MEA))


This paper is motivated by the idea to create, wherever possible, rational mechanisms that adapt pension systems automatically to a changed economic and demographic environment, rather than to leave such adaptations to discretionary high-profile pension reforms which all too often stir political opposition. The paper delineates the theory behind such rational mechanisms, shows the advantages and limits of „self-stabilizing“ pension systems, and compares the Swedish and the German approaches to rule-bound pension policy.

Suggested Citation

  • Axel Börsch-Supan, 2007. "Rational Pension Reform," MEA discussion paper series 07132, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
  • Handle: RePEc:mea:meawpa:07132

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    References listed on IDEAS

    1. Axel Börsch-Supan, 2003. "Labor Market Effects of Population Aging," LABOUR, CEIS, vol. 17(SpecialIs), pages 5-44, August.
    2. Clemens, Johannes, 2006. "Anmerkungen zur geplanten Anhebung des gesetzlichen Rentenalters," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1949 - 2007), ZBW – German National Library of Economics / Leibniz Information Centre for Economics, vol. 86(3), pages 163-167.
    3. James Angresano, 2007. "The Political Future of Social Security in Aging Societies," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 49(4), pages 699-701, December.
    4. Chlon, Agnieszka & Gora, Marek & Rutkowski, Michal, 1999. "Shaping pension reform in Poland : security through diversity," Social Protection and Labor Policy and Technical Notes 20852, The World Bank.
    5. Börsch-Supan, Axel & Reil-Held, Anette & Schunk, Daniel, 2006. "Das Sparverhalten deutscher Haushalte : Erste Erfahrungen mit der Riester-Rente," Papers 07-15, Sonderforschungsbreich 504.
    6. Axel Boersch-Supan & Christina B. Wilke, 2004. "The German Public Pension System: How it Was, How it Will Be," NBER Working Papers 10525, National Bureau of Economic Research, Inc.
    7. Friedrich Breyer & Mathias Kifmann, 2004. "The German Retirement Benefit Formula: Drawbacks and Alternatives," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 60(1), pages 1-63, April.
    8. Axel Börsch-Supan, 2005. "From Traditional DB to Notional DC Systems: The Pension Reform Process in Sweden, Italy, and Germany," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 458-465, 04/05.
    9. Vincenzo Galasso, 2008. "The Political Future of Social Security in Aging Societies," MIT Press Books, The MIT Press, edition 1, volume 1, number 026257246x, July.
    10. Boeri, Tito & Börsch-Supan, Axel & Tabellini, Guido, 2002. "Would you Like to Reform the Pension System? The Opinions of European Citizens," Sonderforschungsbereich 504 Publications 02-22, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
    11. Dirk Krueger & Felix Kubler, 2002. "Intergenerational Risk-Sharing via Social Security when Financial Markets Are Incomplete," American Economic Review, American Economic Association, vol. 92(2), pages 407-410, May.
    12. Valdes-Prieto, Salvador, 2000. " The Financial Stability of Notional Account Pensions," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(3), pages 395-417, June.
    13. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-491, June.
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