Who Really Benefits from Pension Systems?

Christophe Hachon ()

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: A growing empirical literature shows that life expectancy depends on the wage level. Using an overlapping generations model with a small open economy, we explain why this result can change theredistributive properties of unfunded pension systems. We use the concept of "net contribution" to measure this redistributivity of pension systems. We show that Beveridgian pension systems remainprogressive. However, the poorest do not necessarily benefit the most from pension systems. For Bismarkian pension systems, net contributions are regressive. It means that poor agents pay morefor the pension system than they receive from it. Conversely, rich agents receive more from the pension system than they pay for it. For mixed pension systems, it is possible that collected resources are redistributed in favour of the ends of the distribution of wages.

Keywords: Pension system; inequality; length of life; net contribution; Système de retraite; inégalité; espérance de vie; contribution nette (search for similar items in EconPapers)
Date: 2008-05-14
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:halshs-00279651

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