A way out of pay-as-you-go without a double burden
It has repeatedly been proposed to reduce the conventional pay-as-you-go-systems to a base level, leaving advanced retirement provision for private funded systems. However, pay-as-you-go-systems are, in a sense, one way roads, with no available Pareto efficient way out. The paper discusses a combined public debt and taxing strategy which distributes the transition burden equally between future generations, leaving them only moderate losses in terms of present value. It is shown within both a two generations model and a multiple-generations model of OLG type, that, with this strategy, there results only a temporary increase in public debt ratio, which even turns into a public surplus in the long run. The paper argues that such a transformation towards a base pension system would be both economically advisable and politically feasible.
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (02 51) 83-2 29 71
Fax: (02 51) 83-2 29 70
Web page: http://www.wiwi.uni-muenster.de/insiwo
More information through EDIRC
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.:
- Homburg, Stefan, 1990.
"The Efficiency of Unfunded Pension Schemes,"
EconStor Open Access Articles,
ZBW - German National Library of Economics, pages 640-647.
- Martin Feldstein, 2005.
"Structural Reform of Social Security,"
NBER Working Papers
11098, National Bureau of Economic Research, Inc.
- Breyer, Friedrich & Straub, Martin, 1993.
"Welfare effects of unfunded pension systems when labor supply is endogenous,"
Journal of Public Economics,
Elsevier, vol. 50(1), pages 77-91, January.
- Breyer, Friedrich & Straub, Martin, 1991. "Welfare effects of unfunded pension systems when labor supply is endogenous," Discussion Papers, Series I 252, University of Konstanz, Department of Economics.
- Feldstein, Martin, 2005. "Structural Reform of Social Security," Scholarly Articles 2794830, Harvard University Department of Economics.
- Brunner, Johann K., 1993. "Redistribution and the efficiency of the pay-as-you-go pension system," Discussion Papers, Series I 265, University of Konstanz, Department of Economics.
- Börsch-Supan, Axel, 1998. "Zur deutschen Diskussion eines Übergangs vom Umlage- zum Kapitaldeckungsverfahren in der Gesetzlichen Rentenversicherung," Sonderforschungsbereich 504 Publications 98-41, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
- Homburg, Stefan & Richter, Wolfram, 1990. "Eine effizienzorientierte Reform der GRV," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 183-191..
- Yeopil Yoon & Gabriel Talmain, . "Endogenous Fertility, Endogenous Growth and Public Pension System: Should We Switch from a PAYG to a Fully-Funded System?," Discussion Papers 00/31, Department of Economics, University of York.
- Feldstein, Martin S, 1974. "Social Security, Induced Retirement, and Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, vol. 82(5), pages 905-26, Sept./Oct.
When requesting a correction, please mention this item's handle: RePEc:muc:wpaper:200105. 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: (Norbert Hiller)
If references are entirely missing, you can add them using this form.