Please use this identifier to cite or link to this item:
Borgmann, Christoph
Year of Publication: 
Series/Report no.: 
Diskussionsbeiträge, Institut für Finanzwissenschaft der Albert-Ludwigs-Universität Freiburg im Breisgau 100
Pay-as-you-go pension programs can help to share risk amongst generations. While a wage-indexed pension program is best suited to share labor income risk, I show that the combination of stochastic labor income and stochastic population growth may reduce the possibilities for intergenerational risk sharing: Labor income risk can only be shared when individuals are also exposed to demographic risk. For demographic uncertainty the usual categorization of pension programs does not suffice. I therefore introduce policies on how the demographic uncertainty is transmitted via social security. An optimal demographic indexation is derived for a small open economy and a closed economy.
intergenerational risk sharing
social security
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
306.83 kB

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.