Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/108257
Authors: 
Simonovits, András
Year of Publication: 
2012
Series/Report no.: 
IEHAS Discussion Papers MT-DP - 2012/8
Abstract: 
In our model, the government operates a mandatory proportional (contributive) pension system to substitute for the low life-cycle savings of the low-paid myopes. The socially optimal contribution rate is high (equalizing young- and old-age consumption for them), while an appropriate cap on pension contributions makes room for the saving of high-paid far-sighted workers. In our parameterization (with a Pareto earning distribution), the optimal cap can be determined but its aggregate impact is negligible.
Subjects: 
pensions
contribution rate
contribution cap
maximum for taxable earnings
JEL: 
H53
H24
ISBN: 
978-615-5243-01-1
Document Type: 
Working Paper

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