“Better Safe than Sorry” - Individual Risk-free Pension Schemes in the European Union - Macroeconomic Benefits, the Mobile Working Citizen’s Perspective and Why Nots
Variations between the diverse pension systems in the member states of the European Union hamper labour market mobility, across country borders but also within the countries of the European Union. From a macroeconomic perspective, and in the light of demographic pressure, this paper argues that allowing individual instead of collective pension building would greatly improve labour market flexibility and thus enhance the functioning of the monetary union. I argue that working citizens would benefit, for three reasons, from pension saving in a risk-free savings account. First, citizens would have a clear picture of the accumulation of their own pension savings throughout their working life. Second, they would pay hardly any extra costs and, third, once retired they would not be subject to the whims of government or other pension fund managers. This paper investigates the feasibility of individual pension building under various parameter settings by calculating the pension saved during a working life and the pension dis-saved after retirement. The findings show that there are no reasons why the European Union and individual member states should not allow individual risk-free pension savings accounts. This would have macroeconomic benefits and provide a solid pension provision that can enhance mobility, instead of engaging workers in different mandatory collective pension schemes that exist around in the European Union.
|Date of creation:||20 Sep 2011|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
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.:
- van Groezen, Bas & Kiiver, Hannah & Unger, Brigitte, 2009. "Explaining Europeans' preferences for pension provision," European Journal of Political Economy, Elsevier, vol. 25(2), pages 237-246, June.
- Razin, Assaf & Sadka, Efraim, 1999. "Migration and pension with international capital mobility," Journal of Public Economics, Elsevier, vol. 74(1), pages 141-150, October.
- Olivia S. Mitchell, 1998.
"Administrative Costs in Public and Private Retirement Systems,"
in: Privatizing Social Security, pages 403-456
National Bureau of Economic Research, Inc.
- Olivia S. Mitchell, . "Administrative Costs in Public and Private Retirement Systems," Pension Research Council Working Papers 96-4, Wharton School Pension Research Council, University of Pennsylvania.
- Olivia S. Mitchell, 1996. "Administrative Costs in Public and Private Retirement Systems," NBER Working Papers 5734, National Bureau of Economic Research, Inc.
- Vladimir Borgy & Xavier Chojnicki, 2008.
"Labor Migration: Macroeconomic and Demographic Outlook for Europe and Neighbourhood Regions,"
CASE Network Studies and Analyses
0359, CASE-Center for Social and Economic Research.
- Vladimir Borgy & Xavier Chojnicki, 2009. "Labor Migration: Macroeconomic and Demographic Outlook for Europe and Neighborhood Regions," Economie Internationale, CEPII research center, issue 119, pages 115-153.
- Vladimir Borgy & Xavier Chojnicki, 2007. "Labor Migration: Macroeconomic and Demographic Outlook for Europe and Neighborhood Regions," Working Papers 2007-23, CEPII research center.
- Michael Fuchs & Aaron George Grech & Asghar Zaidi, 2006.
"Pension Policy in EU25 and its Possible Impact on Elderly Poverty,"
case116, Centre for Analysis of Social Exclusion, LSE.
- Asghar Zaidi & Aaron George Grech & Michael Fuchs, 2006. "Pension policy in EU25 and its possible impact on elderly poverty," LSE Research Online Documents on Economics 6225, London School of Economics and Political Science, LSE Library.
- Marga Peeters & Ard den Reijer, 2014. "Coordination versus flexibility in wage formation: a focus on the nominal wage impact of productivity in Germany, Greece, Ireland, Portugal, Spain and the United States," Applied Economics, Taylor & Francis Journals, vol. 46(7), pages 698-714, March.
- Bovenberg, A.L. & Koijen, R.S.J. & Nijman, T.E. & Teulings, C.N., 2007. "Saving and investing over the life cycle and the role of collective pension funds," Other publications TiSEM 6eab1341-eda5-4f21-8c06-8, Tilburg University, School of Economics and Management.
- Peter Huber, 2004.
"Inter-regional mobility in Europe: a note on the cross-country evidence,"
Applied Economics Letters,
Taylor & Francis Journals, vol. 11(10), pages 619-624.
- Peter Huber, 2004. "Inter-regional Mobility in Europe. A Note on the Cross-Country Evidence," WIFO Working Papers 221, WIFO.
- Peter Diamond, 1999.
"Administrative Costs and Equilibrium Charges with Individual Accounts,"
NBER Working Papers
7050, National Bureau of Economic Research, Inc.
- Peter A. Diamond, 2000. "Administrative Costs and Equilibrium Charges with Individual Accounts," NBER Chapters, in: Administrative Aspects of Investment-Based Social Security Reform, pages 137-172 National Bureau of Economic Research, Inc.
- Philippe Jorion & William N. Goetzmann, 1999. "Global Stock Markets in the Twentieth Century," Journal of Finance, American Finance Association, vol. 54(3), pages 953-980, 06.
- Van Vliet, Olaf & Been, Jim & Caminada, Koen & Goudswaard, Kees, 2011. "Pension reform and income inequality among the elderly in 15 European countries," MPRA Paper 32940, University Library of Munich, Germany.
- Paul Cavelaars & Jeroen Hessel, 2007. "Regional Labour Mobility in the European Union: Adjustment Mechanism or Disturbance?," DNB Working Papers 137, Netherlands Central Bank, Research Department.
- Marga Peeters & Loek Groot, 2012.
"A Global View On Demographic Pressure And Labour Market Participation,"
Journal of Global Economy,
Research Centre for Social Sciences,Mumbai, India, vol. 8(2), pages 165-194, June.
- Groot, Loek & Peeters, Marga, 2011. "A global view on demographic pressure and labour market participation," MPRA Paper 32057, University Library of Munich, Germany.
- Alain Jousten & Pierre Pestieau, 2002.
"Labor Mobility, Redistribution, and Pension Reform in Europe,"
in: Social Security Pension Reform in Europe, pages 85-108
National Bureau of Economic Research, Inc.
- Jousten, Alain & Pestieau, Pierre, 2001. "Labour Mobility, Redistribution And Pensions Reform In Europe," CEPR Discussion Papers 2792, C.E.P.R. Discussion Papers.
- Börsch-Supan, Axel, 2006. "European welfare state regimes and their generosity towards the elderly," Sonderforschungsbereich 504 Publications 07-24, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
- Holzmann, Robert & Palacios, Robert, 2001. "Individual accounts as social insurance : a World Bank perspective," Social Protection and Labor Policy and Technical Notes 23303, The World Bank.
- Richard Hinz & Heinz P. Rudolph & Pablo Antolin & Juan Yermo, 2010. "Evaluating the Financial Performance of Pension Funds," World Bank Publications, The World Bank, number 2405.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:33571. 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: (Joachim Winter)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.