Means Testing Retirement Benefits: fostering equity or discouraging savings?

James Sefton, Justin Van De Ven and Martin Weale

Economic Journal, 2008, vol. 118, issue 528, 556-590

Abstract: Means testing plays an important role in the UK state pension system. We use a dynamic programming model to consider the effects of a recent policy reform that reduced the marginal tax rates on private income of means tested retirement benefits from 100% to 40%. Our analysis suggests that the policy reform will encourage the poorest third of all households to both save more and delay retirement, and have the opposite effects on richer households. The policy reform provides a reasonable compromise between the distortions associated with high marginal tax rates and the costs of universal benefits provision.

Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (54)

Downloads: (external link)
https://doi.org/10.1111/j.1468-0297.2008.02133.x

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:wly:econjl:v:118:y:2008:i:528:p:556-590

Ordering information: This journal article can be ordered from
http://onlinelibrary ... 1111/(ISSN)1468-0297

Access Statistics for this article

Economic Journal is currently edited by Estelle Cantillon, Martin Cripps, Andrea Galeotti, Morten Ravn, Kjell G. Salvanes, Frederic Vermeulen, Hans-Joachim Voth and Rachel Kranton

More articles in Economic Journal from Royal Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().