Pensions and Intergenerational Risk-Sharing When Relative Consumption Matters

Ennio Bilancini and Massimo D'Antoni ()

Department of Economics University of Siena from Department of Economics, University of Siena

Abstract: Concern for relative consumption introduces an additional source of risk for future pensioners. We study its implications, in terms of optimal risk diversification, for the choice of the mix between a pay-as-you-go and a funded pension systems. We identify a necessary and sufficient condition for the optimal share of pay-as-you-go to be larger when relative consumption matters. We argue that when model parameters assume reasonable values such condition is satisfied

Keywords: pay-as-you-go pensions; fully funded pensions; relative consumption; inter-generational risk-sharing (search for similar items in EconPapers)
JEL-codes: H55 (search for similar items in EconPapers)
Date: Written
View list of references

Downloads: (external link)
http://www.econ-pol.unisi.it/quaderni/541.pdf (application/pdf)

Related works:
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: http://EconPapers.repec.org/RePEc:usi:wpaper:541

Access Statistics for this paper

More papers in Department of Economics University of Siena from Department of Economics, University of Siena
Contact information at EDIRC.
Series data maintained by Fabrizio Becatti ().