 Privatizing social security: a critical assessmentPascal Belan () and Pierre Pestieau No 1997084, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) Abstract: The purpose of this paper is to provide a critical evaluation of theoretical models showing that shifting from pay-as-you-go to funded social security schemes can be made Pareto-improving. Further, it argues that what often makes a reform toward funded schemes attractive is a number of additional features that could have been introduced as well in the unfunded social security system. The paper is organized in three main sections. The first presents a taxonomy of social security systems; this allows for showing that in privatization programs the issue is not just moving from unfunded to fully funded techniques, but also, and above all, individualizing the system is such a way that there is no more redistribution. The second shows that funded and pay-as-you-go schemes are perfectly equivalent as long as the payroll taxes paid during the period of inception of the pay-as-you-go scheme are duly invested. Finally, the third section presents two models of Pareto-improving social security reforms and discusses the assumptions on which they rely. Keywords: social security; privatization; retiremen (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:1997084 Access Statistics for this paper More papers in LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium). Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.