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Who cares about the day after tomorrow? Pension issues when households are myopic or time inconsistent

Author

Listed:
  • Börsch-Supan, Axel
  • Härtl, Klaus
  • Leite, Duarte Nuno

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

Abstract

[German] Die wissenschaftliche Forschung stützt ihre Empfehlungen für die Rentenpolitik traditionell auf formale Modelle. Diese basieren regelmäßig auf der Lebenszyklushypothese, im Rahmen derer rationale Individuen mit perfekter Voraussicht und vollständiger Information betrachtet werden, welche auf eine logische Art und Weise bzgl. der zeitlichen Abfolge ihrer Entscheidungen handeln. Diese Studie beleuchtet ausgewählte Aspekte, in welchen die starren Annahmen der Lebenszyklushypothese nicht weiter gelten. Wir konzentrieren uns dabei auf drei Aspekte, die besonders relevant sind für asiatische Volkswirtschaften mit schnell alternder Bevölkerung: erstens, die Höhe der Ersparnisse für die Altersvorsorge, zweitens, die internationale Diversifikation der Altersvorsorgeaufwendungen und drittens, internationale Auswirkungen von Rentenreformen. [English] Pension economics has traditionally guided pension policy with the help of formal models based on individuals who think in a life cycle context with perfect foresight, full information and in a time-consistent manner. This paper sheds light on selected aspects of pension economics when these assumptions do not hold. We focus on three aspects which are particularly relevant for the quickly aging Asian economies: the volume of savings for old-age provisions, international diversification of retirement savings, and global spillover effects of pension reforms.

Suggested Citation

  • Börsch-Supan, Axel & Härtl, Klaus & Leite, Duarte Nuno, 2017. "Who cares about the day after tomorrow? Pension issues when households are myopic or time inconsistent," MEA discussion paper series 201701, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    • Handle: RePEc:mea:meawpa:201701
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    Cited by:

    1. Börsch-Supan, Axel & Härtl, Klaus & Leite, Duarte N., 2018. "Earnings test, non-actuarial adjustments and flexible retirement," Economics Letters, Elsevier, vol. 173(C), pages 78-83.
    2. Geri, Milva, 2022. "Pension arrangements and economic thinking: unreal assumptions and false predictions in the case of Argentina," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.

    More about this item

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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