Longevity gap, indexation and age-specific average pensions

András Simonovits ()
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András Simonovits: Centre for Economic and Regional Studies, BME MI

No 2217, CERS-IE WORKING PAPERS from Institute of Economics, Centre for Economic and Regional Studies

Abstract: Studying the age-dimension of the probability distribution of pensions while assuming steadily rising real wages and time-invariant benefit-rules, two factors play important roles: (i) the weight of the wages in indexation of benefits in progress; (ii) the longevity gap. Factor (i) acts against relative depreciation of older benefits, while factor (ii) raises the share of higher benefits among older cohorts. Using an example and a model we show how the shape of the average benefit--age-curve depends on the relation between these two factors.

Keywords: public pension system; longevity gap; indexation of pensions in progress; age-specific pensions (search for similar items in EconPapers)
JEL-codes: H55 (search for similar items in EconPapers)
Date: 2022-09
New Economics Papers: this item is included in nep-age
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