The welfare effects of the Finnish survivors’ pension scheme

Niku Määttänen

Nordic Journal of Political Economy, 2014, vol. 39, 3

Abstract: The mandatory pension system in Finland includes survivors’ pensions to surviving spouses. The survivors’ pension scheme has been criticized on equity grounds because it represents a significant net transfer from singles to certain type of married couples. However, before possibly eliminating or reforming the scheme, it is important to understand its welfare effects. In this paper, I analyze survivors’ pensions as part of the overall pension insurance system. I use a numerical life cycle savings model to evaluate the value of current survivors’ pensions for different households in welfare terms. I find that the current survivors’ pensions are likely to be a very valuable part of the overall pension insurance for many households. In the absence of distributional concerns, it would probably be optimal to further increase survivors’ pensions.

JEL-codes: D91 G22 H55 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:noj:journl:v:39:y:2014:p:3

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