Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/33220 
Year of Publication: 
2006
Series/Report no.: 
IZA Discussion Papers No. 1967
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
A Beveridgean pension scheme invariably introduces a wedge between the wage rate and the marginal take-home pay. A Bismarckian one can do so only if it is not actuarially fair, or in the presence of credit rationing. Interestingly, if the two possible sources of distortion are present at the same time, they will tend to offset each other. The distortion may even change sign (the wedge may become a premium). In any case, the same pension contribution will discourage labour less if the scheme is Bismarckian, than if it is Beveridgean.
Subjects: 
tax wedge
Bismarck
Beveridge
public pensions
implicit pension tax
labour
JEL: 
H31
H55
J38
Document Type: 
Working Paper

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