Saving and taxation in a voluntary pension system: Toward an agent-based model

Balazs Kiraly () and Andras Simonovits ()
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Balazs Kiraly: Institute of Physics of Budapest University of Technology, Budapest
Andras Simonovits: Institute of Economics - Centre for Economic and Regional Studies, Hungarian Academy of Sciences also Mathematical Institute of Budapest University of Technology, Budapest

No 1606, CERS-IE WORKING PAPERS from Institute of Economics, Centre for Economic and Regional Studies

Abstract: Mandatory pension systems only partially replace old-age income, therefore the government also operates a voluntary pension system, where savings are matched by government grants. Accounting for the resulting tax expenditure, our models describe the income flow from shortsighted to farsighted workers. 1. In rational models, explicit results are obtained, showing the limited learning of shortsighted workers. 2. In agent-based models, this learning is improved and this raises the shortsighted workers' saving and reduces perverse income redistribution.

Keywords: life-cycle savings; overlapping generations; mandatory pensions; voluntary pensions; agent-based models (search for similar items in EconPapers)
JEL-codes: D91 H55 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2016-02
New Economics Papers: this item is included in nep-age, nep-cmp, nep-net, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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