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Pay-as-you-go versus capital funded pension systems: the issues

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  • Siebert, Horst

Abstract

The paper compares the pay-as-you-go system and a capital funded system of old age insurance. The capital funded system has a higher rate of return. Pension income can be obtained at lower costs for the individual. This implies efficiency gains in terms of higher savings and reduced distortion in the labor markets. Respecting the claims of the pay-as-you-go system implies a transition problem which is studied in detail.

Suggested Citation

  • Siebert, Horst, 1997. "Pay-as-you-go versus capital funded pension systems: the issues," Kiel Working Papers 816, Kiel Institute for the World Economy (IfW).
  • Handle: RePEc:zbw:ifwkwp:816
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    References listed on IDEAS

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    Cited by:

    1. Hans-Werner Sinn, 1999. "Pension Reform and Demographic Crisis: Why a Funded System is Needed and why it is not Needed," CESifo Working Paper Series 195, CESifo.

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    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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