The desirability of pay-as-you-go pensions when relative consumption matters and returns are stochastic

Ennio Bilancini and D’Antoni, Massimo
Authors registered in the RePEc Author Service: Massimo D'Antoni

Economics Letters, 2012, vol. 117, issue 2, 418-422

Abstract: Under concerns for relative consumption a PAYG system becomes more attractive because it insures pensioners against the risk of being outperformed, but it becomes potentially less effective in hedging the risks associated with financial markets. The net effect is ambiguous.

Keywords: Pay-as-you-go pensions; Fully funded pensions; Relative consumption; Risk aversion; Relativity (search for similar items in EconPapers)
JEL-codes: H55 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:117:y:2012:i:2:p:418-422

DOI: 10.1016/j.econlet.2012.06.026

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