In the search for the optimal path to establish a funded pension system

Marcin Bielecki, Krzysztof Makarski, Joanna Tyrowicz and Marcin Waniek ()
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Marcin Waniek: University of Warsaw

No 2015-22, Working Papers from Faculty of Economic Sciences, University of Warsaw

Abstract: We propose a politically feasible instrument for a nearly optimal transition from a pay-as-you-go to a funded scheme in a defined contribution pension system. It consists of compensating the transition generations in the form of pension benefits indexation more generous than would have prevailed in a clean DC system. Thus, this instrument allows to smoothen the welfare costs of transition over future generations via some small implicit debt. Our instrument proves robust to a number of parametric and modeling choices.

Keywords: defined contribution; pay-as-you-go; pre-funded; pension system (search for similar items in EconPapers)
JEL-codes: C60 E17 H55 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2015
New Economics Papers: this item is included in nep-age, nep-dge, nep-mac and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://www.wne.uw.edu.pl/index.php/download_file/1818/ First version, 2015 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:war:wpaper:2015-22

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