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Do Redistributive Pension Systems Increase Inequalities and Welfare?

Christophe Hachon ()

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

Abstract: Using a capital-skill complementarity technology, we analytically show that an increase in the direct redistributivity of Pay-As-You-Go (PAYG) pension systems has a positive impact on wages and on wage inequalities. We also show that life expectancyinequalities play an important role in the achievement of these results. Then, we calibrate our model and we and that, if life expectancy inequalities are suffciently high, a more redistributive pension system increases the wealth and the welfare of every agent of the economy. Moreover, such a policy decreases the tax rate of the pension system.

Keywords: Inequality; Pension System; Redistribution; Capital-Skill Complementarity (search for similar items in EconPapers)
Date: 2008-06-04
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