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Paying for Pensions and Other Public Expenditures: Overtaxing our Children?

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  • Sebald,Alexander C.
  • Neubourg,Chris,de

    (METEOR)

Abstract

This paper argues that although current public pension schemes may shift the major financial burden to future generations, private and public transfers of wealth across generations offset this development. As a result the financing of existing social security and pension arrangements seems to be less problematic than commonly assumed.Policy models that assume there is no linkage between generations except through the state bear little resemblance to empirical reality. An accounting system is therefore needed which highlights the allocation of retirement costs among working and retired population as well as future generations, and includes the public as well as private ledger.Many of the aformentioned features are included in the well-established practice of ‘Generational Accounting’. This paper, however, will integrate private as well as public intergenerational transfers of wealth so as to account not only for the burden, which current generations leave, but also the wealth, which is passed on to future generations.

Suggested Citation

  • Sebald,Alexander C. & Neubourg,Chris,de, 2003. "Paying for Pensions and Other Public Expenditures: Overtaxing our Children?," Research Memorandum 062, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  • Handle: RePEc:unm:umamet:2003062
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    References listed on IDEAS

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    5. Hubert, Florence & Pain, Nigel, 2002. "Fiscal Incentives, European Integration and the Location of Foreign Direct Investment," Manchester School, University of Manchester, vol. 70(3), pages 336-363, June.
    6. Cardarelli, Roberto & Sefton, James & Kotlikoff, Laurence J, 2000. "Generational Accounting in the UK," Economic Journal, Royal Economic Society, vol. 110(467), pages 547-574, November.
    7. Eisner, Robert, 1989. "Budget Deficits: Rhetoric and Reality," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 73-93, Spring.
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