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The Value of Children and Immigrants in a Pay-As-You-Go Pension System: A Proposal for a Partial Transition to a Funded System

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  • Hans-Werner Sinn

Abstract

It is shown that the net fiscal externality created by an additional member of a pay-as-you-go pension system that is endowed with individual accounts equals the gross contributions" of this member. In Germany, this is an amount of about DM 175,000. The paper uses this" information to design a hybrid funded system that avoids this externality and improves the" public pension system under equity and efficiency considerations.

Suggested Citation

  • Hans-Werner Sinn, 1997. "The Value of Children and Immigrants in a Pay-As-You-Go Pension System: A Proposal for a Partial Transition to a Funded System," NBER Working Papers 6229, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:6229
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    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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