Should a pension reform be announced? A reply

Michael Hatcher

Economics Letters, 2019, vol. 183, issue C, -

Abstract: Fedotenkov (2016) shows that a reduction in the pay-as-you-go (PAYG) contribution rate leads to larger welfare losses for the first transitional generation if the reform is announced in advance. His analysis is based on expected lifetime utility at the reform announcement date. This note reconsiders the reform from the alternative perspective of implementation date. It argues that an announced reform may be preferable because it raises realized consumption of the first transitional generation in old age. Implications for social welfare evaluations are illustrated with a numerical example.

Keywords: Pension reform; Announcement; Savings; Welfare (search for similar items in EconPapers)
JEL-codes: E21 H55 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176519302873
Full text for ScienceDirect subscribers only

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: https://EconPapers.repec.org/RePEc:eee:ecolet:v:183:y:2019:i:c:5

DOI: 10.1016/j.econlet.2019.108583

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().