Designing benefit rules for flexible retirement with or without redistribution

The traditional approach to flexible retirement (e.g. NDC) neglects the impact of asymmetric information on actuarial fairness (neutrality). The mechanism design approach (e.g. Diamond, 2003) gives up the requirement of neutrality and looks for a redistributive second-best benefit-retirement-age schedule. Trying to combine the two approaches, the present paper determines the neutral (redistribution-free) second-best solution. This neutral solution is, however, often Pareto-dominated by the redistributive one.

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Year of publication:	2004
Authors:	Simonovits, András
Publisher:	Munich : Center for Economic Studies and Ifo Institute (CESifo)
Subject:	Flexible Altersgrenze \| Versicherungstechnik \| Asymmetrische Information \| Soziale Wohlfahrtsfunktion \| Second Best \| Theorie \| flexible retirement \| asymmetric information \| actuarial fairness (neutrality) \| mechanism design

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Series:	CESifo Working Paper ; 1370
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	477488730 [GVK] hdl:10419/18733 [Handle]
Classification:	D82 - Asymmetric and Private Information ; H55 - Social Security and Public Pensions ; D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving
Source:	EconStor