Old age consumption and pension policy in a two-tier developing economy

Oliver Paddison and Pierre Pestieau

No 2001045, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: In a number of developing countries, an important part of the economy is informal both in terms of production and of social protection. In this paper we consider introducing a universal pension system in the formal sector. It is shown to have two main effects: first, it makes the formal sector more attractive to migration and second, it affects capital accumulation in a way which depends on the type of social security introduced, PAYG or funded, and its induced effect on private saving.

JEL-codes: H55 J61 (search for similar items in EconPapers)
Date: 2001-10
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Journal Article: Old Age Consumption and Pension Policy in a Two-Tier Developing Economy (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2001045

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