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Why Funding is not a Solution to the "Social Security Crisis"

It is now a commonplace that the unfunded public pension systems of many OECD countries will run into severe financing problems in the coming decades due to a dramatically increasing pensioner/worker ratio. While this diagnosis is completely undisputed, there is still a vigorous debate on the appropriate therapy. In this debate, a number of proposals have been brought forward in particular in the last five years, which mainly consist in a (partial) transition to a funded pension system. Because such a transition is not a Pareto improvement, it is necessary to ask what can be the policy target that justifies such a redistributive move? The present paper tries to examine this question by identifying seven fallacies that are commonly made by advocates of such a transition.
Year of publication:
2001
Authors: Breyer, Friedrich
Publisher: Berlin : Deutsches Institut für Wirtschaftsforschung (DIW)
Subject: Gesetzliche Rentenversicherung | Kapitaldeckungsverfahren | Pareto-Optimum | Kritik | Theorie
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Type of publication: Book / Working Paper
Type of publication (narrower categories): Working Paper
Language: English
Other identifiers:
84864171X [GVK]
hdl:10419/18238 [Handle]
RePEc:diw:diwwpp:dp254 [RePEc]
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