The macroeconomics of PAYG pension schemes in an aging society

Lionel Artige (), Laurent Cavenaile and Pierre Pestieau
Additional contact information
Lionel Artige: HEC, University of Liège, B-4000 Liège, Belgium

No 2014033, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: This paper analyzes and compares the macroeconomic performance of defined-benefit and defined-contribution pay-as-you-go pension systems when population ages. When the fertility rate decreases or longevity rises, it is shown that a shift from defined benefit (defined total benefit or defined annuities) to defined contribution always results in higher per-capita income and life-cycle welfare at the steady state. All results are derived with general production and utility functions.

Keywords: aging; defined benefit; defined contribution; fertility; longevity; PAYG pension (search for similar items in EconPapers)
JEL-codes: E13 H55 J13 J26 (search for similar items in EconPapers)
Date: 2014-08-19
New Economics Papers: this item is included in nep-age, nep-mac and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://sites.uclouvain.be/core/publications/coredp/coredp2014.html (application/pdf)

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:cor:louvco:2014033

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.
Bibliographic data for series maintained by Alain GILLIS ().