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Redistributive effects of the US pension system among individuals with different life expectancy

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  • Sanchez-Romero, Miguel
  • Fürnkranz-Prskawetz, Alexia

Abstract

We investigate the differential impact that pension systems have on the labor supply and the accumulation of physical and human capital for individuals that differ by their learning ability and levels of life expectancy. Our analysis is calibrated to the US economy using a general equilibrium model populated by overlapping generations, in which all population groups interact through the pension system, the labor market, and the capital market. Within our framework we analyze the redistributive and macroeconomic effects of a progressive versus a flat replacement rate of the pension system.

Suggested Citation

  • Sanchez-Romero, Miguel & Fürnkranz-Prskawetz, Alexia, 2017. "Redistributive effects of the US pension system among individuals with different life expectancy," ECON WPS - Vienna University of Technology Working Papers in Economic Theory and Policy 03/2017, Vienna University of Technology, Institute for Mathematical Methods in Economics, Research Group Economics (ECON).
  • Handle: RePEc:zbw:tuweco:032017
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Haan, Peter & Kemptner, Daniel & Lüthen, Holger, 2017. "The Rising Longevity Gap by Lifetime Earnings: Distributional Implications for the Pension System," IZA Discussion Papers 11121, Institute of Labor Economics (IZA).
    2. Miguel Sánchez-Romero & Ronald D. Lee & Alexia Prskawetz, 2019. "Redistributive Effects of Different Pension Systems When Longevity Varies by Socioeconomic Status," NBER Working Papers 25944, National Bureau of Economic Research, Inc.
    3. Willem Devriendt & Freddy Heylen, 2018. "Coping With Demographic Change: Macroeconomic Performance And Welfare Inequality Effects Of Public Pension Reform," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 18/948, Ghent University, Faculty of Economics and Business Administration.
    4. repec:ksa:szemle:1789 is not listed on IDEAS
    5. Andras Simonovits, 2018. "Designing pension benefits when longevities increase with wages," IEHAS Discussion Papers 1804, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.

    More about this item

    Keywords

    Human capital; Longevity; Inequality; Life cycle; Social Security;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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