Social Security and Intergenerational Redistribution

Joydeep Bhattacharya and Robert Reed ()

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: Many countries around the world have large public pension programs with significant cross-cohort redistribution. This paper provides a rationale for such programs in a lifecycle framework with search and matching frictions in the labor market. In the model, public pension programs alter the age composition of the labor force by inducing the jobless elderly to retire. This improves the allocation of workers to jobs, raises firm entry and may also improve welfare. By requiring a long history of labor market attachment as a precondition to receiving benefits, these programs raise the future value of current employment for the young. This redistributes bargaining strength and income from the young to the old.

Keywords: search; labor market efficiency; unemployment; lifecycle; pensions (search for similar items in EconPapers)
JEL-codes: E24 J41 J64 (search for similar items in EconPapers)
Date: 2006-08-01
New Economics Papers: this item is included in nep-dge, nep-lab, nep-mac, 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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Related works:
Chapter: Social Security and Intergenerational Redistribution (2006)
Working Paper: Social security and intergenerational redistribution (2006)
Working Paper: Social security and intergenerational redistribution (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:12661

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