Unfunded Pensions and Endogenous Labor Supply

A classic result in dynamic public economics states that there is no welfare rationale for pay-as-you-go (PAYG) pensions in a dynamically-efficient neoclassical economy with exogenous labor supply. Parenthetically, a welfare justification for PAYG pensions exists if the economy is dynamically inefficient. Under a sufficient condition that the old be no less risk-averse than the young, these results extend to an economy with endogenous labor supply.

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Year of publication:	2012-02-10
Authors:	Bhattacharya, Joydeep ; Andersen, Torben M
Institutions:	Department of Economics, Iowa State University
Subject:	social security \| dynamic efficiency \| pay-as-you-go \| Diamond model \| endogenous labor supply

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Extent:	application/pdf
Series:	Staff General Research Papers.
Type of publication:	Book / Working Paper
Notes:	Published in Macroeconomic Dynamics, June 2013, vol. 17 no. 5, pp. 971-997
Classification:	E6 - Macroeconomic Policy Formation, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook ; H3 - Fiscal Policies and Behavior of Economic Agents
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010747670