The Pay-as-you-go Pension System as a Fertility Insurance and Enforcement Device

Hans-Werner Sinn

No 154, CESifo Working Paper Series from CESifo

Abstract: It is argued that a PAYGO system may have useful allocative functions in that it serves as an insurance against not having children and as enforcement device for "rotten kids" who are unwilling to pay their parents a pension. It is true that the system has a moral hazard effect in terms of reducing the investment in human capital, but, if it is run on a sufficiently small scale, this effect will not be strong enough to prevent a welfare improvement. If, on the other hand, the scale of the system is so large that parents bequeath some of their pensions to their children, it is overdrawn and creates unnecessarily strong disincentives for human capital investment.

Date: 1998
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
https://www.cesifo.org/DocDL/ces_wp154.pdf (application/pdf)

Related works:
Journal Article: The pay-as-you-go pension system as fertility insurance and an enforcement device (2004)
Working Paper: The pay-as-you-go pension system as fertility insurance and an enforcement device (2004)
Working Paper: The pay-as-you-go pension system as fertility insurance and an enforcement device (2004)
Working Paper: The Pay-As You-Go Pension System as a Fertility Insurance and Enforcement Device (1998)
Working Paper: The Pay-As-You-Go Pension System as a Fertility Insurance and Enforcement Device (1998)
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:ces:ceswps:_154

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().