Beveridge versus Bismarck public-pension systems in integrated markets

Martin Kolmar

Regional Science and Urban Economics, 2007, vol. 37, issue 6, 649-669

Abstract: The two basic systems according to which pay-as-you-go-financed public-pension systems can be organized are the (Anglo-Saxon) Beveridge system and the (continental) Bismarck system. An ideal Beveridge system provides flat-rate benefits, whereas an ideal Bismarck system provides earnings-related benefits. This paper analyzes the circumstances under which a Beveridge system can be sustainable in systems competition with a Bismarck system. The analysis reveals a much more complicated redistributive structure of the pension systems than only between high and low incomes. As a consequence, the sustainability depends on growth rates, and equilibria can exist where, contrary to the first intuition, even poor individuals prefer a Bismarck and rich individuals prefer a Beveridge system.

Keywords: Market; integration; System; competition; Pension; systems (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0166-0462(07)00012-9
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:regeco:v:37:y:2007:i:6:p:649-669

Access Statistics for this article

Regional Science and Urban Economics is currently edited by D.P McMillen and Y. Zenou

More articles in Regional Science and Urban Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().