The transfer paradox in a pay-as-you-go pension system

Kojun Hamada (), Akihiko Kaneko and Mitsuyoshi Yanagihara ()
Additional contact information
Kojun Hamada: Faculty of Economics, Niigata University
Mitsuyoshi Yanagihara: Graduate School of Economics, Nagoya University

No 1405, Working Papers from Waseda University, Faculty of Political Science and Economics

Abstract: We examine how international transfer affects welfare levels of a donor with a higher marginal propensity to save and a recipient with a lower marginal propensity to save, when both countries adopt a pay-as-you-go (PAYG) pension system using a one-sector overlapping generations model. A PAYG pension scheme is found to lead to impairment of the donor and of the recipient as a result of the transfer under the dynamic efficiency condition. This is because the transfer increases the divergence in the rate of return between PAYG and private savings.

Keywords: ay-as-you-go pension; Transfer paradox; Overlapping generations model (search for similar items in EconPapers)
JEL-codes: D91 E21 F35 F43 H55 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2014-07
New Economics Papers: this item is included in nep-age and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.waseda.jp/fpse/winpec/assets/uploads/20 ... da_Kaneko_Yanagi.pdf First version, 2014 (application/pdf)

Related works:
Journal Article: The transfer paradox in a pay-as-you-go pension system (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wap:wpaper:1405

Access Statistics for this paper

More papers in Working Papers from Waseda University, Faculty of Political Science and Economics Contact information at EDIRC.
Bibliographic data for series maintained by Haruko Noguchi ().