Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/108360
Authors: 
Simonovits, András
Year of Publication: 
2014
Series/Report no.: 
IEHAS Discussion Papers MT-DP - 2014/30
Abstract: 
The dependence of benefit on the retirement age (the schedule) is an important feature in any public pension system. The nonfinancial defined contribution (NDC) pension system has recently become popular mainly because of its allegedly actuarial fairness. Using the framework of mechanism design with adverse selection, these systems have theoretically been criticized because they neglect the resulting regressive intracohort redistribution: longer lived workers retire later and are rewarded as if their life expectancies were average. We document such adverse selection on Hungarian data. The resulting redistribution can be diminished but not eliminated. Giving up mechanism design, we corroborate our earlier qualitative findings in a more realistic framework.
Subjects: 
nonfinancial defined contributions
variable retirement
adverse selection
actuarial fairness
JEL: 
C61
C63
D82
D91
H55
ISBN: 
978-615-5447-49-5
Document Type: 
Working Paper

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