The distributional implications of pension benefit indexation
Torben M. Andersen, Cecilie Marie Løchte Jørgensen
Socio-economic differences in longevity have fuelled a debate whether pension systems have a regressive bias favouring groups with a high life expectancy. We show that the distributional implications of such pooling depend critically on the benefit profile across age/time, which in turn is determined by how benefits are indexed to prices and wages. Choosing indexation scheme involves a choice between a low initial benefit with an increasing profile and a high initial benefit with a flat/decreasing profile, where the former benefits groups with a high life expectancy, and vice versa. We analyse how indexation affects the trade-off between insurance and distribution when groups with different mortality are separated or pooled, and the optimal benefit profile under both standard preferences and temporal risk aversion wrt. the length of life.
Year of publication: |
February 2024
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Authors: | Andersen, Torben M. ; Jørgensen, Cecilie Marie Løchte |
Publisher: |
Munich, Germany : CESifo |
Subject: | annuities | differential mortality | distribution | indexation | Sterblichkeit | Mortality | Einkommensverteilung | Income distribution | Altersvorsorge | Retirement provision | Gesetzliche Rentenversicherung | Public pension system | Private Altersvorsorge | Private retirement provision | Index | Index number | Indexbindung | Indexation | Theorie | Theory |
Saved in:
freely available
Extent: | 1 Online-Ressource (circa 34 Seiten) Illustrationen |
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Series: | CESifo working papers. - München : [Verlag nicht ermittelbar], ISSN 2364-1428, ZDB-ID 2065232-X. - Vol. 10943 (2024) |
Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Graue Literatur ; Non-commercial literature ; Arbeitspapier ; Working Paper |
Language: | English |
Classification: | D14 - Personal Finance ; G22 - Insurance; Insurance Companies ; H55 - Social Security and Public Pensions ; J18 - Public Policy |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10014470411