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Title:Demographic change, endogenous labor supply and the political feasibility of pension reform PDF Logo
Authors:Breyer, Friedrich
Stolte, Klaus
Issue Date:2000
Series/Report no.:DIW-Diskussionspapiere 202
Abstract:Options for reforming unfunded public pension schemes that are now being discussed all share the feature that the burden induced by demographic change would be shifted towards presently living and away from unborn generations. Existing models of the political economy of pension reform can not explain why such reform options are being discussed at all. We present an alternative model in which the possibility of evasion of workers from payment of social security taxes is taken into account by modelling a labor supply function. It turns out that the burden of demographic change may fall completely or at least predominantly on the pensioners. Thus this type of model can much better explain recent trends in legislature on unfunded public pension systems in industrial democracies.
Subjects:Public Pensions
Endogenous Labor Supply
Demographic Change
JEL:H55
J18
J22
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des DIW
DIW-Diskussionspapiere

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