EconPapers    
Economics at your fingertips  
 

Intergenerational Risk Sharing, Stability and Optimality of Alternative Pension Systems

John Hassler () and Assar Lindbeck

No 631, Seminar Papers from Stockholm University, Institute for International Economic Studies

Abstract: In an analysis of the risk-sharing properties of different types of pension systems, we show that only a fixed-fee pay-as-you-go (PAYG) pension systems can provide intergenerational risk sharing for living individuals. Under some circumstances, however, other PAYG pension systems can enhance the expected welfare of all generations by reducing intergenerational income variability. We derive conditions for this to occur. We also analyze the stability of actuarially fair PAYG pension systems. It is shown that if an actuarially fair pension with a non-balanced budget system is dynamically stable, its accumulated surpluses will converge to the same fund as in a fully funded system. We also show that the welfare loss due to labor market distortions will, in fact, increase if the implicit marginal return in a compulsory system is raised above the average return.

Keywords: Pension systems; Pay-as-you-go; intergenerational (search for similar items in EconPapers)
JEL-codes: H55 (search for similar items in EconPapers)
Pages: 33 pages
Date: 1997-10-29
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23) Track citations by RSS feed

Downloads: (external link)
http://su.diva-portal.org/smash/get/diva2:327688/FULLTEXT01 (application/pdf)

Related works:
Working Paper: Intergenerational Risk Sharing, Stability and Optimality of Alternative Pension Systems (1997) Downloads
Working Paper: Intergenerational Risk Sharing, Stability and Optimality of Alternative Pension Systems (1997)
Working Paper: Intergenerational Risk Sharing, Stability and Optimality of Alternative Pension Systems (1997) Downloads
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:hhs:iiessp:0631

Access Statistics for this paper

More papers in Seminar Papers from Stockholm University, Institute for International Economic Studies Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Hanna Christiansson ().

 
Page updated 2020-08-02
Handle: RePEc:hhs:iiessp:0631