Funding social security through Pareto-optimal conversion policies

Bernd Raffelhüschen

Journal of Economics, 1993, vol. 58, issue 1, 105-131

Abstract: This paper examines Pareto-superior funding strategies for a pay-as-you-go financed social security system, using a dynamic simulation approach. A life-cycle model is employed to derive realistic estimates concerning the pure efficiency gains of that policy. As a result, the representative individuals are free to allocate goods as well as leisure time over their life span. The differentiation between efficiency gains and intergenerational redistribution is made possible by a tax-transfer authority which compensates all generations otherwise burdened with debt financed transfer programs. Institutional requirements and the parameter estimates underlying the policy simulations reflect the German social security system, although conclusions about other countries and circumstances could easily be drawn. Copyright Springer-Verlag 1993

Date: 1993
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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:58:y:1993:i:1:p:105-131

DOI: 10.1007/BF03052294

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