PAYG pensions and endogenous retirement revisited

Joachim Thøgersen ()
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Joachim Thøgersen: University of South-Eastern Norway, USN School of business

Economics Bulletin, 2022, vol. 42, issue 4, 1826 - 1835

Abstract: This paper presents an OLG model with endogenous retirement and endogenous growth. The purpose is to show analytically the effects of a PAYG pension system on the economy in such a setting. Firstly, it is shown that a PAYG system is neutral in capital intensity. Secondly, we analytically characterize the conditions that determine the effect of a PAYG system on welfare, and show that a PAYG system can be welfare improving. Thirdly, the analysis and the results apply to a non-steady-state equilibrium path. growth. The purpose is to show analytically the effects of a PAYG pension system on the economy in such a setting. Firstly, it is shown that a PAYG system is neutral in capital intensity. Secondly, we analytically characterize the conditions that determine the effect of a PAYG system on welfare, and show that a PAYG system can be welfare improving. Thirdly, the analysis and the results apply to a non-steady-state equilibrium path.

Keywords: Endogenous retirement; Public pensions; Overlapping Generations; Endogenous Growth (search for similar items in EconPapers)
JEL-codes: D9 H5 (search for similar items in EconPapers)
Date: 2022-12-30
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