Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/149671
Authors: 
Friese, Max
Year of Publication: 
2017
Series/Report no.: 
Thünen-Series of Applied Economic Theory 148
Abstract: 
The paper investigates the impacts of demographic change on the financial sustainability of a pay-as-you-go social security system in an economy with unemployment caused by trade unions. Using a simple two-period overlapping generations approach, it can be shown that the trade union behavior with respect to wage setting may have favorable effects on per capita contributions, if labor demand is sufficiently inelastic with respect to the wage rate. In contrast, if firm's labor demand reacts more sensitive to changes in the wage rate, the behavior of the trade union may amplify the imposed burden of demographic change on the social security system.
Subjects: 
demographic change
PAYG public pensions
trade unions
unemployment
tax burden
output elasticity of capital
wage elasticity of labor demand
JEL: 
E24
H55
J11
J51
Document Type: 
Working Paper

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